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 analysis of the nation's 30 largest markets by Weiss Analytics.
Homes priced higher than $600,000 are more likely to be discounted than less expensive homes. Sellers of some 37% of houses worth over $600,000 have asking prices below their February values, with a median discount of 7.7%. 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 3 to 1.
Markets with the highest percentage of new listings discounted since February are New York (34% of new listings), Baltimore (31% of new listings), and Los Angeles (30% of new listings).
Homes priced at $200,000 or less have fewer discounted listings, about 30%, and the median discount is also lower at 6.3%. Weiss Analytics found that list prices for entry-level properties are supported by tighter supply with new listings exceeding sales at rates of only 1.5 to one.
After 97 straight months of year-over-year gains, first-time buyers and investors have a reprieve, at least temporarily, from monthly price inflation that has made it hard to save for down payments or find profitable rentals.
"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. The future value of entry-level homes faces important uncertainties particularly whether re-opening communities can be sustained so we have an employment recovery. To some degree it is win-win for would-be entry level buyers if prices become more realistic, people maintain their incomes and can borrow to purchase."
The top three markets with the highest average discounts are Pittsburgh (20%), Baltimore (10%), and San Antonio (10%).
| Sellers are discounting listings below pre-pandemic levels | ||||
| Top 30 markets | Week of February 9 to the Week of April 15 | |||
| Sales volume change | Sales Price change | Percentage of new listings discounted | Average discount value change | |
| Atlanta-Sandy Springs-Roswell, GA | -7.7% | 1% | -15.2% | -6% |
| Baltimore-Columbia-Towson, MD | -41.7% | 1% | -15.0% | -10% |
| Boston-Cambridge-Newton, MA-NH | -29.0% | 5% | -22.8% | -6% |
| Charlotte-Concord-Gastonia, NC-SC | 13.6% | -1% | -17.1% | -5% |
| Chicago-Naperville-Elgin, IL-IN-WI | -48.7% | 2% | -38.8% | -7% |
| Cincinnati, OH-KY-IN | -4.5% | 5% | -12.1% | -6% |
| Cleveland-Elyria, OH | 10.1% | 3% | -15.5% | -7% |
| Dallas-Fort Worth-Arlington, TX | -9.0% | 3% | -24.5% | -6% |
| Denver-Aurora-Lakewood, CO | 2.6% | 2% | -25.5% | -4% |
| Detroit-Warren-Dearborn, MI | 26.6% | -1% | -64.0% | -6% |
| Houston-The Woodlands-Sugar Land, TX | -69.5% | 1% | -25.9% | -8% |
| Kansas City, MO-KS | -7.5% | 2% | -1.4% | -7% |
| Los Angeles-Long Beach-Anaheim, CA | -0.8% | 0% | -24.2% | -5% |
| Miami-Fort Lauderdale-West Palm Beach, FL | -7.9% | 2% | -40.9% | -6% |
| Minneapolis-St. Paul-Bloomington, MN-WI | 3.3% | 2% | 9.1% | -6% |
| New York-Newark-Jersey City, NY-NJ-PA | 15.9% | 0% | -59.9% | -8% |
| Orlando-Kissimmee-Sanford, FL | -53.9% | 1% | -25.6% | -4% |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | -14.2% | 2% | -50.3% | -9% |
| Phoenix-Mesa-Scottsdale, AZ | -38.6% | 1% | -7.7% | -3% |
| Pittsburgh, PA | -10.1% | 7% | -69.9% | -20% |
| Portland-Vancouver-Hillsboro, OR-WA | -46.4% | 1% | 7.1% | -5% |
| Riverside-San Bernardino-Ontario, CA | 8.5% | 1% | -24.8% | -4% |
| Sacramento--Roseville--Arden-Arcade, CA | -6.4% | 0% | -13.9% | -3% |
| San Antonio-New Braunfels, TX | -8.4% | 0% | -15.2% | -10% |
| San Diego-Carlsbad, CA | 5.4% | 1% | -27.0% | -5% |
| San Francisco-Oakland-Hayward, CA | -1.4% | 2% | -34.4% | -6% |
| Seattle-Tacoma-Bellevue, WA | -33.7% | 2% | -9.3% | -4% |
| St. Louis, MO-IL | 15.7% | 1% | -1.2% | -9% |
| Tampa-St. Petersburg-Clearwater, FL | 7.2% | 1% | -32.1% | -5% |
| Washington-Arlington-Alexandria, DC-VA-MD-WV | -42.1% | 1% | -8.3% | -4% |
