Home shoppers drowning in steep housing costs may finally get some relief: Prices are crash-landing back to Earth.
Nearly one in four listings on Zillow got a price cut in April—a record for this time of year in data going back to 2018.
Among the 50 largest metro areas, Phoenix had the highest share of price reductions at 37.2%, and both Florida and Texas have two cities in the top 10.
- Phoenix, AZ: 37.2%
- Tampa, FL: 34.7%
- Denver, CO: 34.5%
- Raleigh, NC: 33.8%
- Jacksonville, FL: 32.3%
- Nashville, TN: 31.9%
- Dallas, TX: 31.9%
- Salt Lake City, UT: 31.4%
- San Antonio, TX: 29.6%
- Orlando, FL: 29.4%
Even brand-new homes are getting dumped in the discount bin. More than one-third of builders trimmed their asking prices in May, up from 29% in April; it’s the highest number since December 2023, according to a survey by the National Association of Home Builders/Wells Fargo Housing Market Index.
What price cuts mean for investors
This Red Wedding of price cuts indicates that the balance of power is shifting from sellers to buyers—and this can spell opportunity, particularly for investors.
“With peak policy uncertainty somewhat behind us and mortgage rates still below year-ago levels, investors are in a better position than they have been in a while,” says Zillow senior economist Orphe Divounguy. Plus, a pullback in residential construction should help stabilize rents. “That means the price-to-rent ratio is shrinking and more rental properties might become more attractive investments.”
“Price reductions at this scale tell me that we’re moving into a market where buyers and investors can regain some negotiating power,” agrees Mike Wall, founder of EZsellhomebuyers.com. And although the reduced price might already seem like a bargain, “I absolutely treat price cuts as invitations to negotiate further,” he says. “A reduced list price doesn’t mean it’s at the bottom; in fact, it often means the seller is just starting to get realistic.”
One of Wall’s recent acquisitions, a brick ranch outside of Dayton, OH, had already dropped its price by $15K. “I offered another $10K below that,” he says. “The seller took it because they were just ready to be done, and I was bringing cash, speed, and certainty to the table. For investors, this is the time to get creative. Price cuts can open the door for seller financing, subject-to deals, and other structures that weren’t on the table 18 months ago.”
Let’s Make a Game Plan
Boost your investment game with expert real estate insights. We'll keep you up to date on everything you need to know to be the smartest real estate investor you can be.
“Smart buyers should absolutely target price-reduced properties now,” says Los Angeles real estate agent Wesley Kang. “I tell investors to watch for specific patterns. Like when a seller drops the price three times in six weeks, they’ll usually accept 15% below their last cut. Properties sitting 45 to 60 days after their last cut often have sellers ready to negotiate seriously. Right now, the sweet spot for offers sits around 12% below recent reductions on luxury properties and 8% on mid-range homes.”
What price cuts mean for sellers
If you’re hoping to sell a home this summer, it won’t be the cakewalk it used to be.
“Many sellers were hoping that the market would take off this spring. Now, the numbers show that it is going to stay slow,” says Andrew Fortune at Great Colorado Homes. “Over half of our listings have been reduced, with more about to be reduced. We are now in a buyer’s market, and sellers are slowly coming to terms with that.”
Selling now involves monitoring the market closely. If you hear crickets, it’s best to reduce your price sooner rather than later.
“Waiting too long to cut can cost you more in the long run,” warns Wall. “I recently listed a fully remodeled brick ranch in Springfield [OH] for $219,900. After a few weeks and no offers, we dropped the price and included $6K in closing costs to keep the deal alive.”
Even after you’ve slashed your price, brace for buyers to smell your desperation.
“Sellers aren’t quite as offended by a lowball offer as they were a couple years ago,” Fortune says. “Sellers will respond with the level of desperation they are currently experiencing, which is growing monthly.”