Home value growth is slowing, and price cuts on for-sale listings are increasing as conditions incrementally move from a seller's market to normal levels, according to Zillow economic research director Aaron Terrazas.
In June 2018, 14.2 percent of all for-sale homes listed on Zillow had a price reduction, in keeping with the 12 to 14 percent range that has held since mid-2013, but is up from 13.4 percent in June 2017. Terrazas explains that this growth can be attributed to homes priced in the top third of the market, as those properties had 0.9 percent more price cuts annually, whereas homes in the bottom third of the market had 0.1 percent fewer price cuts.
And the national trend holds in a number of notable local markets, as well. Since the beginning of the year, higher-priced listings have seen a disproportionately large increase in price cuts in 23 of the 35 largest metros analyzed by Zillow. And in June, a larger share of top-tier listings had at least one price cut than bottom-tier listings in all of the 35 largest markets. There are fewer listings with a price cut in some of the nation’s more affordable housing markets. San Antonio, Phoenix, Philadelphia and Houston reported a smaller percentage of listings with a price cut in June than a year ago.