Around a quarter of homes listed since the COVID-19 outbreak have been priced at discounts below pre-pandemic levels, according to a study from Weiss Analytics.
The research firm analyzed the country's 30 largest residential property markets from the week of February 9 to the week of April 15 and found that one in four home sellers who have listed their homes since the pandemic shuttered the economy in mid-March have discounted their homes below their February value.
The study also found that homes priced higher than $600,000 are more likely to be discounted than less expensive homes. Sellers of some 37% of houses worth over $600,000 have asking prices below their February values, with a median discount of 7.7%. Conversely, homes priced at $200,000 or less have fewer discounted listings, about 30%, and the median discount is also lower at 6.3%.
The markets with the highest percentage of new listings discounted since February are New York (34% of new listings), Baltimore (31%), and Los Angeles (30%). Meanwhile, the top three markets with the highest average discounts are Pittsburgh (20%), Baltimore (10%), and San Antonio (10%).
"These higher discounts for more expensive homes, and current relative strength for lower priced houses is significant," said Allan Weiss, chief executive officer of Weiss Analytics. "The implosion of the non-QM
mortgage market is contributing to softer demand and more discounting by sellers at these higher price levels. To some degree it is win-win for would-be entry-level buyers if prices become more realistic, people maintain their incomes and can borrow to purchase."