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Home Sellers Are Slashing Prices in These Big Cities
By Pete Grieve MONEY RESEARCH COLLECTIVE
A new report finds steep home discounts as rising inventory gives buyers more leverage.
Home shoppers in major cities are finding some of the largest discounts in recent years, with the most significant price cuts in metros like Pittsburgh, New Orleans and Austin, Texas, according to Zillow.
In a new report released Monday, the online real estate marketplace said typical discounts added up to $25,000 in October, “matching the biggest discounts Zillow has tracked.” The report states that home sellers are often dropping prices multiple times before a sale.
As housing inventory continues to grow, driving more price cuts, there is “a sliver of an opening” for prospective buyers who are finally seeing improved conditions in some major U.S. cities, the report says.
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View RatesMortgage rates in the low-6% range are making costs slightly more manageable compared to the past two fall seasons. Zillow suggests that “patient” shoppers can potentially find a good deal on a home purchase when sellers cut prices on homes that have lingered on the market.
The smallest median home price discounts are mainly found in more affordable metros with a solid pace of home sales. Oklahoma City (-$15,000), Louisville, Kentucky (-$15,000) and St. Louis (-$15,100) topped that list. But where are the largest price cuts?
10 metros where sellers are offering huge home price cuts
Of the 50 largest metro statistical areas, or MSAs, these are the cities with the largest median price cuts in October, according to Zillow:
- San Jose, California: -$70,900
- Los Angeles: -$61,000
- San Francisco: -$59,001
- New York: -$50,000
- San Diego: -$50,000
- Boston: -$49,900
- Seattle: -$41,000
- Austin, Texas: -$36,000
- Portland, Oregon: -$31,901
- Sacramento, California: -$30,900
It’s not surprising that many of the most expensive markets are at the top of this list. In San Jose, which ranks first, the typical sale price is over $1.3 million, which is nearly four times the typical U.S. home price, according to Zillow data. By nature, home price cuts will often be larger in such an expensive city.
In more affordable housing markets, “smaller cuts can represent a bigger relative discount for buyers,” Zillow explains in the report. For example, the median price cut of $70,900 in San Jose is only around 5% of the typical home value.
In other words, when you consider the context of home prices, those pricey West Coast and Northeast markets no longer dominate the list.
Relative to home values, these are the five markets with the largest discounts in October:
- Pittsburgh (about -9% of the typical home value)
- New Orleans (-9%)
- Austin, Texas (-8.4%)
- Houston (-8.2%)
- San Antonio (-7.9%)
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Pete Grieve is a New York-based reporter who covers personal finance news. At Money, Pete covers trending stories that affect Americans’ wallets on topics including car buying, insurance, housing, credit cards, retirement and taxes. He studied political science and photography at the University of Chicago, where he was editor-in-chief of The Chicago Maroon. Pete began his career as a professional journalist in 2019. Prior to joining Money, he was a health reporter for Spectrum News in Ohio, where he wrote digital stories and appeared on TV to provide coverage to a statewide audience. He has also written for the San Francisco Chronicle, the Chicago Sun-Times and CNN Politics. Pete received extensive journalism training through Report for America, a nonprofit organization that places reporters in newsrooms to cover underreported issues and communities, and he attended the annual Investigative Reporters and Editors conference in 2021. Pete has discussed his reporting in interviews with outlets including the Columbia Journalism Review and WBEZ (Chicago's NPR station). He’s been a panelist at the Chicago Headline Club’s FOIA Fest and he received the Institute on Political Journalism’s $2,500 Award for Excellence in Collegiate Reporting in 2017. An essay he wrote for Grey City magazine was published in a 2020 book, Remembering J. Z. Smith: A Career and its Consequence.