Tuesday, November 8, 2022

Homesellers are slashing prices. Here’s how to spot deals right away

Homebuyers who want to scour home listings in their area for price cuts will find the lion’s share if they check by Thursday, and their favorite overpriced home might be worth revisiting at the three-week mark.

The main wave of price cuts takes place from Monday through Thursday, and the biggest chunk is saved for the end of that window each week, Zillow’s research team said in a recent report.

At the same time, as the winter months approach, the time window in which existing sellers are likely to cut their asking price may be narrowing.

“Frenzied market speeds home shoppers may associate with the pandemic seem to be slowing down, which is more good news for buyers,” the Zillow report reads. “However, as new listings fail to enter the market at their usual pace, this year’s buyers could feel as though there are fewer fresh options to choose from each week.”

Buyers who have been keeping an eye on a particular overpriced home may want to consider reaching back out to the seller about three weeks after it’s first listed, if it hasn’t sold by then. That’s when a seller entertaining a price cut typically pulls the trigger these days, Zillow found.

The chart below, compiled by Zillow, shows how sellers and their agents have been quicker to turn to price cuts if their homes didn’t sell in the fast-paced pandemic market.

Buyers should also keep in mind, though, that the share of listings with a price cut tends to drop substantially in the winter months, if past years are any indication.

As recently as January of this year, a home would sit on the market for five weeks before the seller resorted to a price drop. In a typical year, that length of time has been closer to seven weeks during the winter months.

But as with virtually every trend since the pandemic began, the months to come may be far from typical. The housing market as a whole is in the midst of a swift cooldown as demand comes off its highs of the last few years.

Higher mortgage rates are one factor, and it’s unclear how they might affect transactions — and seller pricing behavior — in the months to come.

But for now, the buyer who finds a price drop might still be getting a substantial discount from the initial asking price. The typical price cut amounts to 3.1 percent of the asking price, or $11,000 on the typical home, Zillow’s team found.

That’s smaller than the typical price cut in 2021, but a step above what the market saw in previous years.


This article was written by Daniel Houston from Inman News and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.