New Tool Highlights Best Housing Deals

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NEW YORK (MainStreet) — A new online tool may make homebuyers think twice before paying the asking price on a home.

Trulia, an online real estate listings service, recently launched an interactive map that helpers buyers and sellers alike find out the average listing price for homes by city or ZIP code, as well as the typical length of time it takes for sellers in each region to drop the price if the house doesn’t sell. It also tells how much they drop list prices (when they do).

On average, home sellers across the U.S. cut the price of the property by 8% after it sat on the market for 79 days, according to Trulia’s data. What’s more, about a third of all sellers will actually cut the price a second time if the home sits on the market long enough. However, as the map shows, each of these numbers varies significantly from one region to the next.

With the new feature, users can zoom in on specific towns and compare the average initial list prices and subsequent reductions with those of neighboring areas to get a better sense of whether a particular property is as good a deal as it seems.

Not surprisingly, Trulia’s data shows that the regions hit hardest by the housing collapse are the quickest to lower the asking price on homes. Three of the five cities that were quickest to lower prices were in California, a state particularly hard hit by the housing crunch. Real estate in San Diego, for example, was on the market for an average of 50 days before the first price reduction, while houses in Oakland were on the market for just 45 days before doing so.

Likewise, sellers in particularly turbulent housing markets like Detroit and Miami offered the largest price reductions, dropping initial list prices by 11% and 19% respectively. If you’re looking for a bargain, these are the places to go, but of course, the sharp decreases are indicative of the volatility of these particular housing markets.

“Sellers who don't cut their homes' list prices deeply enough the first time face a long lag-time on the market and a high chance of needing to make a second cut, which can result in lowball offers from buyers,” said Tara-Nicholle Nelson, consumer educator for Trulia. “We also see a pattern of sellers making early, deep and multiple discounts in foreclosure hot spots such as Michigan, Florida, Maryland and California – a bad omen for the future of home values in these already depressed areas.”

By comparison, home owners in Northeast cities and in states like North Carolina and Texas where the housing market is better off took longer to reduce prices and these homeowners cut costs less than the average. Sellers in New York let property sit unsold for an average of 80 days before reducing the price, making the Big Apple the biggest holdout on price reductions, while several cities including Boston and Raleigh, N.C., tied for the lowest average price reduction at just 5%.

Trulia’s data is based on real estate listings collected by the site between March 2010 and March 2011, and do not factor in pricing trends for distressed properties like foreclosures.

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