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Price Reductions in Pandemic Era
Dec 6, 2022
By   Internet
  • City News
  • Real Estate
  • Home Price Trend
  • Property Market
Abstract: During the COVID-19 pandemic, many buyers rushed to purchase vacation homes. Now, with higher mortgage rates, a setback in the stock market and high inflation, many buyers are holding off on buying non-essential real estate.

1. Arizona


Median listing price: $465,000


Percentage of listings with reduced prices in October 2022, 40%.


Difference since October 2021, +30%


Arizona has seen wild swings in real estate prices over the past few cycles.


In the mid-2000s, Arizona real estate prices skyrocketed to the point where they became the hallmark of the real estate collapse in 2008.


The drop in values and demand was so great that entire neighborhoods on the edge of Phoenix were filled with brand new homes that remained empty after buyer demand evaporated.


A sense of déjà vu is understandable over the past few years, as listing prices in the Phoenix area soared again during the pandemic, rising 60 percent between the end of 2019 and May of this year, according to Realtor.com.


Arizona went from having one in 10 listings drop in price a year ago to having more than one in three listings drop in price.


2. Nevada


Median listing price: $469,000


Percentage of listings with price reductions, 37%


Difference since October 2021, +23%


If there is one other market in the West that has defined the current boom-bust real estate pricing cycle, it is Las Vegas. And, again, Nevada is at the top of the list for housing market turnaround.


The absence of a state income tax, along with a low cost of living and relatively more affordable housing, made it a natural place for a quick, seller-friendly market in the early days of the pandemic.


A year ago, only 1 in 7 listings were priced lower than the initial price, while now it's 1 in 3.


The portion of listings with price reductions jumped 2.6 percent in the past month, and prices have fallen about 7 percent since the summer.



For shoppers looking in the Silver State, it's not hard to find homes with reduced prices.


For example, in Sparks, east of Reno, these new three-bedroom townhomes are listed at $44,000, down about 12.5 percent from their initial listing price six months ago.


3. Utah


Median listing price: $560,000


Percentage of listings with price reductions, 32%

Difference since October 2021, +22%


Utah has seen an influx of new residents over the past decade, with population growth of about 17%. The state's abundance of outdoor activities brought increased demand during the pandemic.


But after rising values, prices dropped about 12 percent in places like Ogden, the city with the highest percentage of homes marked down in Utah at 42 percent.


The metro, located about 30 minutes north of Salt Lake City, saw prices rise 75 percent between the end of 2019 and mid-2022.


So even with price cuts, homes are still well above pre-pandemic prices.


And it doesn't take much of a search to find big discounts.


This large new four-bedroom home in Saratoga Springs, about 45 minutes south of Salt Lake City, is now listed for $654,000, compared to $730,000 back in June.


4. Texas


Median listing price: $371,650


Percentage of listings with price reductions: 25%


Difference since October 2021, +14%


The Lone Star State has had a renaissance in recent years, with Austin, the capital and tech hub, becoming a magnet for people looking for a vibrant urban scene.


There's bustling industry and culture, but with all the benefits Texas offers over high-cost coastal cities, especially cheaper home prices and no personal income tax.


During the pandemic, the entire state benefited because people saw it as a place to take the inflated equity they brought with them from high-priced areas and upgrade to something bigger, on bigger land, with money left over.


However, with every rise comes a fall, and this real estate icon of the pandemic era has seen prices slashed. A quarter of the listings have been reduced in price.


This mid-century four-bedroom home in the Big Hill neighborhood north of Austin sold for $499,000 after being listed for sale in August, a price reduction of $75,000, or 13 percent.


5. Georgia


Median listing price: $375,000


Percentage of listings with price reductions: 22%


Variance since October 2021, +14%


The real estate market is starting to become more attractive for buyers looking for discounts in Georgia.


In the Georgia resale market, some sellers have been pricing their homes as if they were 6 or 12 months old still, hoping they will be the last to take advantage of the seller's market.


Homes are priced incorrectly, causing them to be on the market longer than sellers expect, which leads to lower prices.


6. South Carolina


Median listing price: $354,230


Percentage of listings with price reductions: 22%

Variance since October 2021, +13%


South Carolina is another southern state seeing a big influx of buyers from more expensive, dense urban centers.


South Carolina is in the middle of the East Coast, but it has beautiful weather, low taxes, and a high quality of life.


That led to a surge in demand, with prices climbing more than 30 percent during the pandemic.


But in some of the Palmetto State's larger cities, prices are down nearly 10 percent since the peak earlier this year.


For some sellers, the rapid drop in demand is a hard pill to swallow.


While that may not be what sellers want to hear, it's much easier for buyers now.

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