In our October 8, 2009 posting we commented on a widely quoted Trulia .com® report describing how existing home sellers were cutting their listing prices. We felt that the headlines were alarmist “Home Sellers in U. S. Cut Prices by $28.4 Billion.” We went on to point out that:
1. Although 25.6% of sellers cut their listing prices, that meant that 74.6% did not.
2. And, yes, $28.4 billion is a lot of money, but we determined that the total value of all listings was $1.1 trillion; so a $28.4 billion cut was only about 2.5% of the total value of all listings.
3. And, also meaning that since the average price cut was 10%, the approximate average price reduction for all listings was only about 2.5%.
Being curious, and wondering how local listing prices were faring, we requested the same figures from Trulia for the Piedmont Triad of North Carolina. And here they are.
| Price Reductions For Listings In North Carolina Communities | |||||
| As Of October 1, 2009 | |||||
| City | Percent of listings with price reductions | Average Price Before Reduction | Average Reduction (%) | Average Reduction ($) | Average Price After Reduction |
| Winston Salem | 29.5% | $211,033 | 6.1% | $12,829 | $198,204 |
| Greensboro | 27.9% | $246,438 | 6.3% | $15,414 | $231,024 |
| Burlington | 20.4% | $226,564 | 6.7% | $15,266 | $211,298 |
| Overall | 27.5% | $228,214 | 6.2% | $14,222 |
$213,992 |
| Courtesy of Trulia.com® | |||||
So for the Piedmont Triad of North Carolina:
1. 27.5% of sellers as of 10-1-09 cut their listing prices; 72.5% did not.
2. Price reductions in the Triad amounted to $24.2 million. Again, a big number, but when compared to the total value of all homes listed in the Triad of $1.4 billion, it only amounts to 1.7% of the total.
3. A 6.2% reduction on 27.5% of the homes yields an average overall listing price reduction of 1.7%.
Further analysis of this data shows that 27.5% of Triad listings had reductions compared with 25.6% nationwide, giving the Triad about 7.4% more homes with reductions than the average. However, the Triad price reductions on the homes that had price reductions averaged only 6.2%, or about 38% less than the national average. The average overall reductions worked out to a 1.7% reduction in listing prices for all homes listed. This is 32.2% less than the 2.5% overall reductions in listing prices nationwide.
So, overall, it looks like Triad Home Listings are in significantly better shape than the average listing countrywide. Hopefully, this is reflective of a stronger market that will result in better home sales and firming sales prices in the near future.
Housing 101 