More than one in five homes for sale nationwide dropped its price in the last month. In Fresno it was two in five.
More than any time in the past few years, 2019 is shaping up to be a good year for homebuyers. One way the market has shifted to buyers: More price drops. As of mid-February, more than one in five homes for sale had a price drop—the largest February rate in at least 10 years.
Price drops are a highly cyclical measure, typically peaking late in the year and falling dramatically to start each new year, and this year is no different. However, even though the share of homes with price drops is down quite a bit from the fall and isn’t up year-over-year as much as it was then either (+5.5 points then vs. +3.6 points now), it is starting 2019 at a much higher level than the past several years.
There are still a few markets where as many as one in three homes for sale have seen a price drop. Among metro areas with at least 500,000 people, Fresno, California leads the pack with 40.4 percent of homes having dropped the price. Here are the top ten.
Table: Top 10 Metro Areas with the Largest Share of Homes for Sale with a Price Drop
| Rank | Metro Area | Share of Homes for Sale with a Price Drop in the prior 4 Weeks as of Week 7 2019 | Share of Homes for Sale with a Price Drop in the prior 4 Weeks as of Week 7 2018 |
|---|---|---|---|
| 1 | Fresno, CA | 40.4% | 40.1% |
| 2 | Tampa, FL | 33.3% | 28.3% |
| 3 | Indianapolis, IN | 32.4% | 24.9% |
| 4 | Bakersfield, CA | 31.4% | 30.8% |
| 5 | Phoenix, AZ | 30.7% | 23.2% |
| 6 | Cape Coral, FL | 30.2% | 28.5% |
| 7 | Denver, CO | 29.6% | 19.0% |
| 8 | Orlando, FL | 28.8% | 21.4% |
| 9 | Deltona, FL | 27.2% | 25.8% |
| 10 | Sacramento, CA | 26.6% | 22.3% |
(Among metro areas with a population of 500,000 or more)
While many of the areas with the largest share of price drops have been at high levels for a while, there are some metros where price drops are on the rise and are much more common than they were are a year ago. Las Vegas (+13.6 points), Seattle (+12.8 points) and Albuquerque (+12.2 points) saw the largest year-over-year increases in the share of homes for sale with a price drop.
“Many sellers listed their homes late last year just as rising prices and mortgage rates were starting to price out their core pool of potential buyers,” said Las Vegas Redfin agent Jennifer Brockman. “Meanwhile, some buyers are starting to think that waiting to purchase a home could pay off, especially as listing inventory continues to rise. In this new market reality, buyers may have negotiating power now that they won’t have in the spring and summer.”
Table: Top 10 Metro Areas with the Largest Increase in the Share of Homes for Sale With a Price Drop
| Rank | Metro Area | Percentage Point Increase in Price Drops 2018 to 2019 (Week 7) | Share of Homes for Sale with a Price Drop in the prior 4 Weeks as of Week 7 2019 | Share of Homes for Sale with a Price Drop in the prior 4 Weeks as of Week 7 2018 |
|---|---|---|---|---|
| 1 | Las Vegas, NV | 13.6 | 24.9% | 11.3% |
| 2 | Seattle, WA | 12.8 | 25.7% | 13.0% |
| 3 | Albuquerque, NM | 12.2 | 26.5% | 14.3% |
| 4 | San Jose, CA | 11.1 | 17.9% | 6.8% |
| 5 | Denver, CO | 10.6 | 29.6% | 19.0% |
| 6 | Palm Bay, FL | 9.5 | 20.4% | 10.9% |
| 7 | Atlanta, GA | 9.0 | 22.4% | 13.4% |
| 8 | Phoenix, AZ | 7.5 | 30.7% | 23.2% |
| 9 | Indianapolis, IN | 7.5 | 32.4% | 24.9% |
| 10 | Orlando, FL | 7.4 | 28.8% | 21.4% |
(Among metro areas with a population of 500,000 or more)
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