Home shoppers in the fall saw some of the steepest price cuts in years. A new Zillow analysis showed that the typical listing received cumulative discounts totaling $25,000 in October — matching the biggest discounts Zillow has tracked.
These deeper discounts reflect a housing market slowly finding balance, according to Zillow. Home sellers are recalibrating their expectations on the fly, recognizing that affordability pressures are weighing on today’s buyers — and that they can still turn a profit after a price cut. The typical size of an individual price cut has barely budged in recent years, holding near $10,000. With listings taking longer to move, sellers are increasingly trimming prices more than once as they adjust to a more buyer-friendly market.
"Most homeowners have seen their home values soar over the past several years, which gives them the flexibility for a price cut or two while still walking away with a profit," Zillow Senior Economist Kara Ng said in a release. "These discounts are bringing more listings in line with buyers’ budgets and helping fuel the most active fall housing market in three years. Patient buyers are reaping the rewards as the market continues to rebalance."
These results underscore how quickly the rebalancing housing market is changing strategies for both buyers and sellers, according to Zillow. Home sellers say the most valuable service an agent provides is help pricing their home and understanding the local market, according to the Zillow Consumer Housing Trends Report. From a buyer’s perspective, clear visibility into these price adjustments helps them make informed decisions as conditions continue to shift.
The biggest median discounts from initial list price appear in some of the nation’s most expensive markets: San Jose ($70,900), Los Angeles ($61,000), San Francisco ($59,001), New York ($50,000) and San Diego ($50,000).
In markets where homes cost less to begin with, smaller cuts can represent a bigger relative discount for buyers, according to Zillow. In Pittsburgh, a typical markdown of $20,000 equals about 9 percent of the metro’s typical home value, which is the largest relative discount among major markets. New Orleans homes are also typically discounted by 9 percent of the metro's typical home value, with buyers in Austin (8.4 percent), Houston (8.2 percent) and San Antonio (7.9 percent) seeing the next-best deals.
At the other end of the spectrum are metros where sellers haven't had to budge much on price, according to Zillow. Oklahoma City ($15,000), Louisville ($15,000), St. Louis ($15,100), Indianapolis ($16,000) and Detroit ($17,100) recorded the smallest cumulative discounts in October. In all but Oklahoma City, homes are selling faster than the national average and listings tend to be newer, signs of steady demand and sellers who don’t need to discount as deeply to attract a buyer.