Now that homes are re-entering the market, about one out of four home sellers who listed their homes for sale since the outbreak of the coronavirus pandemic has priced them at discounts below pre-pandemic price levels, according to a new report from Weiss Analytics.
These lower prices are creating market conditions that are more appealing to buyers.
“These higher discounts for more expensive homes and current relative strength for lower-priced houses is significant,” said Allan Weiss, CEO of Weiss Analytics and co-founder of Case Shiller Weiss. “The implosion of the non-QM mortgage market is contributing to softer demand and more discounting by sellers at these higher price levels.”
According to the report, homes priced higher than $600,000 are more likely to be discounted than the less expensive homes.
Homes that are priced at $200,000 or less have fewer discounted listings, about 30%, while the median discount is lower, at 6.3%.
Sellers of 37% of houses worth over $600,000 have asking prices below their February values, with a median discount of 7.7%, according to Weiss Analytics.
The market share of higher-priced listings that are discounted has increased every week since the pandemic slowed real estate sales in March. New listings for these houses have outpaced sales by three to one, the report said.
New York had the highest percentage of new listings discounted since February, with 34%. Baltimore followed with 31% and Los Angeles was closely after with 30%.
The report said that after 97 months in a row of year-over-year gains, first-time homebuyers and investors have a temporary reprieve from monthly price inflation.
The three markets with the highest average discounts are Pittsburgh, 20%; Baltimore, 10%; and San Antonio, 10%.
While “homes for sale” Google searches have increased 54%, Zillow said that the number of new listings of higher-end homes are down 46%, while listings for the least expensive homes are down only 32%.