BAM’s Key Details:
- New research from Zillow shows homebuyers should look for price cuts on Thursdays, not Fridays or weekends
- Home price cuts are typically around 3% of the list price—about $11,000 on the median-priced home
- Around 30% of sellers have reduced their prices—the biggest share since 2018
Homebuyers who can afford today’s mortgage rates shouldn’t wait for Black Friday to shop for their next home. According to new Zillow research, Thursdays are the day when sellers are most likely to cut their prices.
The average price cut is around 3%, which, for a typical home, saves the buyer around $11,000.
So, while Black Friday may still be the day for buying home decor and home-related tech at steep discounts, Thursdays, for most metros, are the best day to snag a bargain on a new home.
A record number of sellers cut their prices this fall
This fall, thanks to cooling buyer demand, a record 28% of sellers cut their prices. And when they did, 18.5% of them made those cuts on a Thursday.
Less than 14% of home price cuts are happening on Fridays. And less than 10% are happening on Saturdays and Sundays.
That said, the Thursday savings are only a little above other core days of the week. So if a buyer spots a bargain on Monday, it doesn’t make much sense to wait until Thursday, hoping for a steeper price cut.
Different days for different metros
The timing for price cuts can vary a bit depending on the metro area.
For example, price cuts happen more often on Tuesdays in Baltimore and Philadelphia. And Monday is the best day for bargains in Detroit, Buffalo, and Cleveland.
But on Fridays and weekends, when sellers are more likely to be busy with open houses and showings, buyers nationwide are less likely to get a deal on a new home.
How big a discount can buyers expect?
The typical home listing with a price cut saw a price reduction between 2.6% and 3.8% from 2018 to the present. But given the home appreciation in the last few years, that now amounts to a double-digit price cut: nearly $11,000.
Buffalo home shoppers can find the biggest bargains; the typical price cut in this metro was 4.6% in September 2022—cutting $11,291 off the original list price.
Close behind were Pittsburgh and Cleveland, with a typical price cut of 4.2% and 4.0%, respectively.
At the other end of the spectrum, shoppers in Phoenix will see smaller reductions. The typical price cut in this metro was 2.3%. But given the 43% price growth (from 2019), that 2.3% packs a bigger punch.
Following Phoenix are Jacksonville and Denver, with a typical price cut of 2.4%
How long are homes listed before sellers cut prices?
How long do sellers wait before cutting their list prices? For the bulk of the year, outside the slower pace of the winter months, sellers typically cut their prices about a month after listing their homes.
The housing market typically slows down during the winter months, with sellers waiting roughly seven weeks before cutting their prices.
Even before the pandemic, metros like Salt Lake City had a fast market. In mid-October 2019, sellers would wait roughly two weeks before the first price cut. And today, the pace is still around that level.
Meanwhile, at the other end of the waiting spectrum, Miami has a slower market, despite its rapid appreciation. In mid-October 2019, the typical home sat on the market for 34 days before the first price cut. This year, that time is down to 30 days.
Top takeaways for real estate agents
Thanks to the mortgage-rate-fueled balancing of the housing market, homebuyers in 2022 are seeing a larger than usual share of home listings with a price cut—and bigger discounts in dollar terms. Collect and share this data to help your buyer clients find the best deals in their market.
They’ll remember the agent who helped them find a great home at a lower price than they expected to pay.
With the slowdown of the housing market, buyers who can afford today’s mortgage rates can take more time to consider the homes in their chosen neighborhood—and they stand a better chance of negotiating a lower price, with your help, along with other buyer incentives.
With older homes, the option of waiting on a home inspection is all the more valuable. Encourage your buyers to go into negotiations with full awareness of the home’s issues—and keep their bottom-line number in mind.