There has been a recent spike in price reductions in the real estate market. What does that mean to you? We’re going to take a closer look today.
Last month, Zillow revealed an uptick in price reductions across the country. According to the report, there were more price cuts this year than last year in over ⅔ of the nation’s largest metro. About 14% of all listings had a price cut in June and listings with price cuts increased by 1.2% nationally since January. That’s the greatest January-to-June increase ever reported and more than double the increase we saw last year. Here in the 91326, almost 40% of all the active listings on the market have seen price reductions this year.
This recent trend doesn’t mean that home values have depreciated or are about to decrease. Over the past few years, sellers have been pricing their homes above their actual value and overanxious buyers have been biting. That’s the expectation for a lot of sellers right now. If a home is overpriced and the price drops a bit, it’s value hasn’t gone down, just the price.
Home prices are still expected to increase over the next year according to analysts, especially due to the lack of inventory. Our supply of homes continues to be low and keep us in a seller’s market.
What this does mean is that sellers should be more conservative when it comes to pricing their homes, especially in the upper end of the market. Sellers have been listing their homes at inflated prices, and that’s simply not going to work anymore. We’re starting to see that play out right now.
“Home prices are still expected to increase over the next year.”
If you have any questions for us about the real estate market in the meantime, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.
