Have you been scrolling through Zillow and noticing price cut after price cut? It\u2019s not a coincidence.<\/p>\n
Zillow reports that in April, more than 20% of listings in the South Florida area had a price reduction \u2014 roughly 1 in 5 single-family homes. What\u2019s more, compared with the rest of the country, South Florida is seeing slightly larger cuts. Zillow\u2019s data shows the median price reduction locally is about 3.1%, compared with 2.7% nationally.<\/p>\n
So why is that happening?<\/p>\n
Mischa Fisher, chief economist at Zillow, says many sellers are still anchored to the red\u2011hot housing market of recent years.<\/p>\n
\u201cWhat we tend to think of is we\u2019ve had a very, very hot housing market in relatively recent memory, and a lot of people anchored their expectations to that when they went to sell,\u201d Fisher said. \u201cIt\u2019s the seller trying to be more competitive in the market today. In the end, you\u2019re going to sell your house for as much as somebody is willing to buy it for.\u201d<\/p>\n
Fisher says that while price cuts are common, they\u2019re actually happening less often than last year. This year, about 20.6% of listings in the Miami metro area have seen price reductions, compared with 24.2% last year.<\/p>\n
One reason for the decline in price cuts may be lower inventory. Fisher says that\u2019s not necessarily bad news for buyers.<\/p>\n
He explains that while South Florida is not \u201caffordable\u201d by traditional standards, affordability is improving. Buyers today may be able to afford slightly more than they could last year, and with fewer homes on the market, they may be willing to stretch their budgets.<\/p>\n
Sellers, he says, are adjusting to meet buyers in that \u201csweet spot\u201d \u2014 hence the price cuts. So if you\u2019re a buyer and you see a price reduction, what should you look for?<\/p>\n
\u201cYou want to look at time on market, the size of the price cut, the frequency of those, and you want to make sure you are looking at the property,\u201d Fisher said. \u201cThere\u2019s a different story between a house that looks like it\u2019s fairly priced and keeps cutting price versus a house that was clearly optimistically priced and is cutting price. Those are potentially telling you two different signals.\u201d<\/p>\n
And if you\u2019re a seller, Fisher says it\u2019s crucial to price your home correctly from the start. If not, it could take longer to sell.<\/p>\n