Let's Talk Price Reductions

[Russell Brazil]

Let's talk price reductions.

Price reductions are up dramatically currently. 14.9% of listings nationally are experiencing price reductions. This sounds scary....but is it really?

2021 saw 11.9% of listings experience reductions and 8% in 2020.

But how does that compare to a normal market?

2017-2019 was a normal sellers market. Hot, but not insane. And in those years we saw 18%, 16%, and 20% of listings experience price reductions. The normal range for price reductions in sellers markets is for between 15% and 22% of listings to have a price drop.

So at 14.9%, slightly under the nornal range what we are seeing is the market normalizing after 2+ years of insanity.

Many people will interpret whats going on in the market and sensationalize it, including the media. In fact this came up because of some terrible information I saw in the BP Facebook group. Year over year stats are going to look scary. But if we compare just about any stat currently to 2015-2019, we are going to see numbers today are right in line with a normal sellers market still. (Not even a market at equilibrium or a buyers market).

So instead of 25 offers on a property, we are seeing 5 offers on the good properties.(This is my market on offers, not a national or actual number)
 

The markets still competitive, just not insane.

And we should start to see different markets experiencing different trends going forward which is normal. It's normal for Vegas to be in a buyers market while LA to be in a sellers market at the same exact time. (Im not saying either is, or will be, just that local market conditions can be different in different locations)