The market is red hot, but rents and home prices can’t just accelerate in perpetuity.
Trulia reports that the market may be softening as landlords and sellers have cut prices and rents. Of the 100 largest metros, 70 of them saw the share of for-sale listings with a price reduction increase from last year to this year. Altogether, there was a 0.52 percentage point increasing in for-sale price cuts from 2015 to 2016 (10.66 percent for 2016, up from 10.14 percent last year).
Between October 2015 and September 2016, the amount of reductions for rental listings increased 1.35 percentage points to 9.32 percent, up from 7.97 up of rental listings the previous 12-month interval. Also, 80 of the 100 largest metros saw the share of rental listings that had a price reduction increase from last year to this year.
The rise in price cuts jibes with reports suggesting ever-rising rents and prices may be hitting a ceiling. … Most months in 2016 exhibited a higher proportion of for-sale listings with price reductions compared to months exactly one year ago as shown in the line chart below. Again, we are not arguing that home prices have been declining. In fact, the median for-sale listing prices increased 6.8% from last year to this year. What our study does tell you, however, is that the market might be showing signs of softening.
Trulia also found the steepest price cuts for both for-sale homes and rentals by metro.