Home sale prices have grown more than 20% over the last five years, according to Forbes, while rental prices have grown by over 12% in the same period. Given this trend, Forbes states that many wonder if a peak could be near – but Trulia has found that the uptick in costs has actually led to an increase in listing price cuts.
In the 12 months ending in September, 10.66% of for-sale listings fell in price, up from 10.14% last year. 70 out of 100 of the largest metro areas experienced an increase in price reductions year-over-year. On the rental side, 9.32% of rental listings have undergone reductions, up from 7.97% last year. 80 out of 100 of the largest metro areas experienced a reduction increase YOY.
Trulia found that this practice is most common on the luxury end of the market. 11.99% of luxury-sale listings saw price reductions this year, up from 11.01% last year.
“Some of the most expensive markets are showing noticeable signs of slow down,” said Trulia Chief Economist Ralph McLaughlin in a conversation earlier this year. “We think affordability is reaching a tipping point.”