U.S. Buyers Pay Closer to Listing Price in August, Still Negotiating Thousands in Discounts

October 11, 2009

Home buyers in much of the U.S. are still paying thousands of dollars below the home’s asking price, but had slightly less negotiating power in August 2009 than they did in July, according to the August Zillow Real Estate Market Reports. Buyers paid a median $6,525, or 3% less than the last listing price on homes bought in August, down from $7,018, or 3.3%, less for homes bought in July. Negotiating power peaked in January 2009, when buyers were paying 4.5% less than last listing price, a median of $10,096. Meanwhile, sellers continue to cut prices on unsold homes. One quarter (24.7%) of all homes listed for sale on Zillow had at least one listing price reduction as of Oct. 1, 2009. The median U.S. price reduction was 6.6% off the original listing price.House

Florida home buyers again in August had the most negotiating power, with buyers in the Vero Beach metropolitan statistical area (MSA) paying 8.9%, or a median $20,974, less than the last listing price. Buyers in the Naples MSA paid 8% less than list price. The Naples, Daytona Beach, Miami-Fort Lauderdale, Ocala, Lakeland, Punta Gorda, Melbourne, Gainesville, Tampa, Jacksonville and Fort Myers MSAs also ranked, in that order, as the top markets for negotiation.

But in two California markets, buyers paid more than asking price during August. In the El Centro MSA, buyers paid 2.2%, or a median $2,479, more than asking price. In the Stockton MSA, buyers paid 1.3%, or $2,515, more.

“Negotiating power is a clear reflection of inventory levels, which dropped nationally in August. Tighter supply in some markets is translating into less of a discount off listing price,” said Zillow Chief Economist Dr. Stan Humphries. “Unfortunately, the brisk spring and summer home shopping season is drawing to a close now, and with foreclosures on the rise again, inventory levels will likely head back up in the coming months, leading buyers’ negotiating power to regain the ground it lost in August.”

For more information, visit www.Zillow.com.

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Zillow: U.S. Home Buyer Negotiating Power Falls in August

October 8, 2009

Home buyers in much of the United States paid thousands of dollars below the asking price, but had slightly less negotiating power in August than in July, real estate website Zillow.com said on Thursday.

According to the Zillow Real Estate Market Reports, buyers paid 3 percent less, or a median of $6,525 below the listing price on homes bought in August, down from $7,018, or 3.3 percent, less for homes bought in July.

Buyers’ negotiating power peaked in January, when buyers were paying 4.5 percent less than last listing price, a median of $10,096, Zillow said.Piggy

Meanwhile, sellers continued to cut prices on unsold homes. One quarter, or 24.7 percent, of all homes listed for sale on Zillow had at least one listing price reduction as of October 1, 2009. The median U.S. price reduction was 6.6 percent off the original listing price, the reports showed.

Florida home buyers again in August had the most negotiating power, with buyers in the Vero Beach metropolitan statistical area (MSA) paying 8.9 percent less — or a median $20,974 — than the last listing price. Buyers in the Naples MSA paid 8 percent less than list price.

The Naples, Daytona Beach, Miami-Fort Lauderdale, Ocala, Lakeland, Punta Gorda, Melbourne, Gainesville, Tampa, Jacksonville and Fort Myers MSAs also ranked, in that order, as the top markets for negotiation, Zillow said.

But in two California markets, buyers paid more than asking price during August. In the El Centro MSA, buyers paid 2.2 percent, or a median $2,479, more than asking price. In the Stockton MSA, buyers paid 1.3 percent more, or $2,515, the reports showed.

“Negotiating power is a clear reflection of inventory levels, which dropped nationally in August. Tighter supply in some markets is translating into less of a discount off listing price,” Stan Humphries, Zillow chief economist, said in a statement.

“Unfortunately, the brisk spring and summer home shopping season is drawing to a close now, and with foreclosures on the rise again, inventory levels will likely head back up in the coming months, leading buyers’ negotiating power to regain the ground it lost in August,” he said.

Source: Reuters

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Builder Confidence Up, But Tax Fears Loom

September 18, 2009

NEW YORK — An index of home builders’ confidence rose in September for the third month in a row, but an industry group said Wednesday the fragile residential real estate market recovery could be cut short if a popular government tax credit isn’t extended.

The National Association of Home Builders said that its Housing Market Index, which it compiles for Wells Fargo, rose one point last month to 19 — the highest level since May 2008.

The index, which fell to an all-time low of 8 in January, has increased steadily in 2009 as the housing market picked up in many parts of the country.

According to NAHB, the rebound in builder confidence is largely due to a temporary tax credit that the government created last year for first-time home buyers. Low mortgage rates and rock-bottom home prices also helped boost confidence, the group says.

The credit, which can be as high as $8,000, was established as part of the government’s economic recovery act to help stimulate demand and revive the battered housing market.

As the market begins to show some sings of life, however, builders are becoming worried that the credit, which is set to expire Nov. 30, will not be renewed.

“The window is now basically closed for being able to start a new home that can be completed in time for buyers to take advantage of the tax credit,” said Joe Robson, NAHB’s chairman and a home builder from Tulsa, Okla, in a statement. “Builders are concerned about what will keep the market moving once the credit is gone.”

To that end, the index component that measures builders’ expectations for sales in the near future fell one point in September to 29, after rising for five months in a row.

More than 1.5 million taxpayers are expected to claim the credit, according to an NAHB spokeswoman.

Tax

Meanwhile, the National Association of Realtors said earlier this month that the credit has already brought 1.2 million new buyers into the market, including 350,000 buyers who would not have purchased a home without the credit.

White House press secretary Robert Gibbs said Wednesday that the Obama administration is evaluating how the tax credit has impacted home sales and could recommend that the President extend it.

While the tax credit has helped stabilize the housing market, falling home prices are the real reason why sales have begun to rebound, according to Mike Larson, real estate and interest rate analyst at Weiss Research.

“I believe the tax credit is the icing on the cake of this housing market recovery, not the cake itself,” Larson said in a research report.

Indeed, a government report released earlier this month showed that roughly 315,000 people have claimed the tax credit so far. However, industry analysts point out that those figures reflect a small portion of homebuyers who could ultimately claim it.

For buyers interested in taking advantage of the credit, time is of the essence.

Because it usually takes around 90 days to close on a house after a contract is signed, buyers have very little time left to act. As of Sept. 16, 78 days remain before the credit ends.

In addition to uncertainty about the tax credit, builders are also wary about a “critical lack of credit” for new home construction projects and ongoing problems related to appraisals that NAHB says are sinking one quarter of all new-home sales.

“These concerns need to be addressed if we are to embark on a sustained housing recovery that will help bolster economic growth,” said NAHB chief economist David Crowe, in a statement.

Source: CNNMoney.com

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U.S. Homebuyers Paid $7,039 Less Than Listing Price in July

September 15, 2009

Amid continued falling home prices, U.S. homebuyers are negotiating even more discounts at the bargaining table, according to July’s Zillow Real Estate Market Reports. Buyers paid 3.3%, or a nearly $7,039, less than the last listing price on homes for sale during the month of July 2009. That is down slightly from 3.5%, or $7,630, in June, and substantially down from 4.6% ($10,260) in January.

Meanwhile, 22.8% of all homes listed for sale on Zillow had at least one listing price reduction as of Sept. 1, 2009. The median U.S. price reduction was 6.5% off the original listing price. Homes listed for sale on Zillow during August were listed for a median 96 days, up from 91 in July.

Florida homebuyers had the most negotiating power in July, with buyers in the Vero Beach metropolitan statistical area (MSA) paying 10.2%, or a median $23,500, less than the last listing price. Buyers in the Sarasota MSA paid 8.2% less than list price. The Naples, Daytona Beach, Miami-Fort Lauderdale, Panama City, Punta Gorda, Melbourne, Ocala, Tampa, Jacksonville, Port St. Lucie, Gainesville and Lakeland MSAs also ranked, in that order, in the top 25 markets for negotiation. There was less or no room for negotiation in some California markets that have been hard-hit by foreclosures. In the El Centro MSA, buyers paid 1.8%, or a median of $2,150, more than the listing price. In seven California markets- Sacramento, Merced, Modesto, Riverside, Stockton, Yuba City and Fresno- asking price and sale price were the same.

“The strong summer selling season in 2009 has led to a decreasing difference between the last listing price and final sale price, but most buyers are still getting some additional discount at selling time,” said Zillow Chief Economist Dr. Stan Humphries. “We expected list-to-sale price ratios to fall as the sales volume picked up during the summer, and the California markets are showing strong declines in the discount off the last listing price, relative to levels at the start of the year. This is fueled both by increased sales and high proportion of foreclosures re-sales, which are already priced relatively low.

“The fact that many Florida markets are still showing comparatively higher differences between the last listing price and final sale price suggests that inventory levels are still relatively high, keeping considerable downward pressure on prices and encouraging buyers to seek large discounts off the listing price. Overall, buyers are finding favorable conditions for negotiating prices, and now can be a good time to buy, provided homebuyers are financially prepared with healthy down payments and intend to stay in their home for a minimum of five to seven years.”

Source: RISMedia

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More Home Sellers Cutting Prices

September 14, 2009

More than one in four U.S. homes for sale on Sept. 1 had their prices cut at least once since landing on the market, up slightly from a month earlier, a study showed on Friday.

As of Sept. 1, a total of 26 percent of homes had their prices reduced, up from 25 percent on Aug.1, Trulia.com said in its monthly price report.

Driving the increase was the pending expiration of the government’s $8,000 tax credit for first-time home buyers — part of the stimulus bill — and summer months which are the peak sales period, according to data compiled by Trulia.com.

The average discount was 10 percent from the original price, unchanged from August. On average, sellers dropped their price by $39,378, Trulia said.

“Housing data has shown us that sales are on the rise this summer and aggressive pricing is one of the factors driving these sales,” said Pete Flint, Trulia co-founder and CEO, in an interview with Reuters. “The other factor is the $8,000 first time home buyers credit which we believe will continue to drive a high volume of sales for the next few months.”

Home sellers looking to sell their property before the tax credit expires in November will continue to cut prices in hopes of attracting home buyers in search of discounts, he said.

Several cities have seen consistent month-over-month increases in the percentage of listings with price reductions from June 1 to Sept. 1. They include Kansas City, Missouri; Colorado Springs, Colorado; Omaha, Nebraska; Atlanta, Georgia; Indianapolis, Indiana; Memphis, Tennessee; Milwaukee, Wisconsin; and Raleigh, North Carolina, Trulia said.

Nationwide, in dollar terms, $28.5 billion has been reduced for all homes for sale on the market on September 1, up by more than $1.1 billion from June to September, the data showed.

Of the luxury homes, categorized by those costing $2 million or more, 26 percent have seen a reduction, up from 25 percent. The average decrease for a luxury home was 14 percent off the original asking price, the data showed.

For homes listed for less than $2 million, 25 percent have seen a reduction, consistent on a month-over-month basis. The deduction, however, was only 9 percent off the original asking price, the data showed.

Source: CNBC

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Buyers Remain Largely in the Driver’s Seat

September 11, 2009

Homebuyers continue to drive hard bargains, holding down prices while allowing properties to sit on the market for an increasing length of time, according to Zillow.com’s market report.

Nationwide, buyers paid 3.3 percent, or nearly $7,039, less than the last listing price on homes for sale during the month of July. That is a slight improvement over June, when the discount was 3.5 percent and significantly less than the 4.6 percent discount in January.

For Sale

Meanwhile, 22.8 percent of all homes listed for sale on Zillow had at least one listing price reduction as of Sept. 1. The median U.S. price reduction was 6.5 percent off the original listing price. Homes listed for sale on Zillow during August were listed for a median 96 days, up from 91 in July.

Florida homebuyers got the best deals with buyers in the Vero Beach area, paying 10.2 percent, or a median $23,500, less than the last listing prices. Other Florida cities with a percentage of discount in the top 25 nationally were Naples, Daytona Beach, Miami-Fort Lauderdale, Panama City, Punta Gorda, Melbourne, Ocala, Tampa, Jacksonville, Port St. Lucie, Gainesville, and Lakeland.

In California, the situation is swinging in the other direction. In El Centro, Calif., buyers paid 1.8 percent, or a median of $2,150, more than the listing price. In seven California markets – Sacramento, Merced, Modesto, Riverside, Stockton, Yuba City and Fresno – asking price and sale price were the same.

Source: REALTOR.org

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