Trulia.com's December 2010 Price Reductions Report

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U.S. housing market backtracks with 23% year-over-year rise in price reductions. Contributing factors include the tax credit expiration, mortgage rates, housing inventory and unemployment. Among 50 largest U.S. cities, the ones with the highest price reduction levels include Minneapolis, Mesa, Phoenix, Baltimore and Tucson. In a year-over-year comparison, the U.S. cities with the highest percentage change in price reductions include Fresno, Long Beach, Albuquerque, San Diego and Las Vegas.

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Trulia.com's December 2010 Price Reductions Report

  1. 1. Trulia price reduction dataDecember 2010<br />1<br />
  2. 2. Top Level Findings<br />Nationally, the number of listings with at least one price cut grew by 23%, from 22% in December 2009 to 27% in December 2010.<br />Among the 50 largest U.S. cities, 32 experienced price reduction levels at 30% or higher this month compared to 14 in December 2009 – jumping by 128.5%.<br />
  3. 3. Top Level Findings<br />Four U.S. cities experienced price reduction levels higher than 40%.<br />Minneapolis continues to have the highest levels at 44%, followed by Mesa at 43%, Phoenix at 42% and Baltimore at 40%.<br />Last year, only one city – Minneapolis – had that distinction.<br />
  4. 4. U.S. Cities with Highest Price Reductions Levels in December 2010<br />First-time Homebuyer Tax Credit Expires<br />
  5. 5. Top Level Findings<br />The 10 U.S. cities with the highest percentage change in price reductions between December 2009 and December 2010 each resided in the western and southwestern states of California, New Mexico, Nevada, Arizona and Texas.<br />At the top of the list, Fresno more than doubled its year-over-year price reductions by 117% while Mesa and Phoenix – which have two of the highest price reduction levels this month – increased by 54% and 50% respectively.<br />
  6. 6. U.S. Cities with Highest Percentage Change in Price Reductions<br />
  7. 7. Contributing Factors<br />TAX CREDIT: The first-time homebuyer tax credit helped stabilize prices by creating short-term demand, but failed as a quick fix for recovery. Since expiring in April, price reductions nationwide grew steadily by 42% from 19% in March to 27% in December.<br />MORTGAGES: Today’s fast-rising but still-low mortgage rates have not been a compelling force to encourage would-be homeowners to buy. In a year-over-year comparison, weekly averages for 30 year fixed-rate mortgages actually improved slightly – decreasing by 5.3% from 4.71% during the week of 12/3/09 to 4.46% during the week of 12/2/10.<br />HOUSING INVENTORY: Supply continues to outnumber demand, forcing sellers to make bold price cuts in very imbalanced housing market. The number of homes on the market increased by 7.5%, increasing to a 10.5 month supply (3.86 million listings) at the end of October.<br />UNEMPLOYMENT: Job creation will be the strongest indicator that the real estate market is recovering. Last month, the unemployment rate rose to 9.8% from 9.4% in November 2009, which correlates with the steady increase in national price reduction levels.<br />
  8. 8. Background and Methodology<br />Trulia Price ReductionsTrulia was the first national real estate site to provide consumers with the ability to use price reductions as a search filter in their quest to find a deal in today's market across all 50 states. Trulia's Price Reduction feature can be accessed from the Trulia homepage and is deeply integrated into the existing search experience on the search results page and via the advanced search tab. Detailed information regarding multiple price reductions and prior sold data is now available on each property listing page. Providing home buyers with access to price reduction data empowers them to make more informed decisions regarding which home to purchase and helps consumers get the most home for their dollar. Price reduction data also helps home sellers price their homes competitively as more homes come onto the market.<br />Methodology<br /> All price change data is from live listings on Trulia.com, as of December 1, 2010 and tracks all price reductions from December 1, 2009 to December 1, 2010. This data does not include foreclosure properties. Trulia obtains its listing information from brokers, agents, third party aggregators and Multiple Listing Services (MLSs).  The percentage of listings with price reductions includes any non-foreclosure property on Trulia.com that has experienced at least one price reduction since it was first posted on the site. The city level data is for listings within the city boundary, and not for metro areas.<br />

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