Where Home Buyers Are Finding the Biggest Price Cuts Right Now

If you have been waiting for a break in the housing market, there is some good news. According to a recent report from Zillow, home sellers in many major U.S. cities are slashing their asking prices to attract buyers.

In October, the typical price discount hit $25,000. This matches the highest discounts Zillow has ever tracked. Because there are more houses on the market now, sellers are often forced to drop their prices—sometimes more than once—to make a sale.
 

Where the Biggest Dollar Savings Are

Unsurprisingly, the cities with the highest home prices are seeing the biggest cuts in terms of total dollars. Since houses in these areas are more expensive to begin with, the discounts tend to look much larger.

The top five cities for total dollar discounts in October were:
 

1. San Jose, California: -$70,900
2. Los Angeles, California: -$61,000
3. San Francisco, California: -$59,001
4. New York City, New York: -$50,000
5. San Diego, California: -$50,000

While these numbers seem huge, they only represent a small portion of the home’s total value. For example, a $70,900 cut in San Jose is only about 5% of the average home price there, which is over $1.3 million.
 

Where You Get the Most "Bang for Your Buck"

If you look at where buyers are getting the biggest discount relative to the home's actual value, the list looks very different. In these cities, the price cuts represent a larger percentage of the total price, giving buyers more room to negotiate.

The five cities with the largest discounts compared to home value are:
 

1. Pittsburgh, Pennsylvania: 9% off
2. New Orleans, Louisiana: 9% off
3. Austin, Texas: 8.4% off
4. Houston, Texas: 8.2% off
5. San Antonio, Texas: 7.9% off

 

Why Is This Happening?

Several factors are working in favor of home buyers right now:
 

• More Options: There are more homes for sale (inventory) than in previous months, which means sellers have more competition.
• Mortgage Rates: Rates have settled into the low-6% range. While still higher than a few years ago, they are more manageable than they were during the last two autumn seasons.
• Lingering Listings: Homes that stay on the market for a long time are the most likely to see significant price drops.

 

The Bottom Line

For "patient" shoppers, there is a "sliver of an opening" to find a deal. While affordable cities like Oklahoma City and St.

Louis still has smaller discounts (around $15,000), and the national trend shows that sellers are becoming much more willing to negotiate to get their homes sold.

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