Home buyers in major metropolitan areas are currently experiencing some of the most significant discounts seen in recent years. Cities such as Pittsburgh, New Orleans, and Austin, Texas are particularly notable, according to insightful data from Zillow.
A recent report published on Monday by the online real estate platform reveals that average price reductions amounted to an impressive $25,000 in October, marking a record for the largest discounts tracked by Zillow. The report highlights that home sellers are frequently reducing prices multiple times before finalizing a sale.
As the housing inventory continues to increase, leading to more frequent price reductions, there is “a sliver of an opening” for potential buyers. This shift indicates that conditions are finally improving in several major U.S. cities, as noted in the report.
The current mortgage rates hovering in the low-6% range are making the financial aspects of home buying slightly more manageable compared to previous fall seasons. Zillow advises that “patient” shoppers can find excellent deals on home purchases as sellers are slashing prices on properties that have remained on the market for extended periods.
The smallest median home price discounts are primarily seen in more affordable metropolitan areas where home sales remain robust. Cities such as Oklahoma City (-$15,000), Louisville, Kentucky (-$15,000), and St. Louis (-$15,100) lead this list. But where are the largest price reductions occurring?
Discover the Top 10 Metros Offering Significant Home Price Reductions
Among the 50 largest metro statistical areas (MSAs), these cities recorded the most substantial 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 is not surprising that many of the most expensive markets appear at the top of this list. In San Jose, which ranks first, the average sale price exceeds $1.3 million, nearly four times the typical home price across the United States, according to data from Zillow. Therefore, it is reasonable to expect larger home price cuts in such an expensive city.
In more affordable housing markets, “smaller cuts can represent a bigger relative discount for buyers,” explains Zillow in the report. For instance, the median price reduction of $70,900 in San Jose constitutes only about 5% of the typical home value.
Essentially, when you take into account the context of home prices, the pricey markets of the West Coast and Northeast no longer dominate the list in terms of relative discounts.
In relation to home values, the following are the five markets offering the largest discounts in October:
- Pittsburgh (approximately -9% of the typical home value)
- New Orleans (-9%)
- Austin, Texas (-8.4%)
- Houston (-8.2%)
- San Antonio (-7.9%)
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