The home price indexing, analytics, and forecasting firm says its data show that about one-fourth of listings since the COVID-19 outbreak began in those markets were priced at discounts from pre-pandemic prices, and that the percentage goes up for higher-priced homes.
"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," Weiss Analytics said in a news release.
The higher they are, the faster they fall
The company said its research found that 37% of homes recently listed for more than $600,000 were being offered at a median discount of 7.7% from their February values. New listings for such homes have outpaced sales by 3 to 1, the company said, and the discount has increased every week since March.
The Weiss Analytics report said homes priced at less than $200,000, by contrast, have been discounted about 30% of the time and at a median of 6.3%. Tighter supply also is buoying that market tier, with listings only exceeding ratings by a ratio of 1.5 to 1.
The percentage of new listings discounted vary widely by market. The highest were New York at 34% discounted since February, followed by Baltimore and Los Angeles at 31% and 30%, respectively, Weiss Analytics said. The highest discounts were in Pittsburgh (20%) as well as Baltimore and San Antonio, at 10% each.
Facing important uncertainties
"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."
And while lower-priced homes would seem to be a sweet spot for buyers as their personal economies recover, much depends on the job market bouncing back as cities and states strive to get back to a new normal. (The New York Times reported Wednesday, May 20, that all 50 states have begun reopening.)
"The future value of entry-level homes faces important uncertainties, particularly whether reopening communities can be sustained so we have an employment recovery," Weiss said.
"To some degree, it's a win-win for would-be entry-level buyers if prices become more realistic, people maintain their incomes and they can borrow to purchase," he added.
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