After the spring selling season flopped, the housing market is finally heating up in the colder autumn months as sellers slash prices more aggressively.
While the typical individual discount remains $10,000, sellers are increasingly offering multiple reductions as tepid demand leaves homes on the market for longer, according to Zillow. As a result, the cumulative price cut in October hit $25,000, matching the largest discounts Zillow has ever recorded.
The data comes just in time for Black Friday. But instead of looking for holiday-shopping deals on toys, sweaters, and electronics, consumers in some cities could get 9% off a home’s typical value.
“Most homeowners have seen their home values soar over the past several years, which gives them the flexibility for a price cut or two while still walking away with a profit,” Zillow Senior Economist Kara Ng said in a statement released on Monday. “These discounts are bringing more listings in line with buyers’ budgets, and helping fuel the most active fall housing market in three years. Patient buyers are reaping the rewards as the market continues to rebalance.”
The most expensive housing markets have the largest median discounts by dollar value: San Jose ($70,900), Los Angeles ($61,000), San Francisco ($59,001), New York ($50,000) and San Diego ($50,000).
But when looking at discounts as a share of a home’s value, cities in other regions actually have better deals. For example, the typical markdown in Pittsburgh is $20,000—a fraction of the discount in the bigger markets—but it represents 9% of that metro area’s home value, according to Zillow.
New Orleans also boasts a 9% discount, while Austin’s is 8.4%, Houston’s is 8.2%, and San Antonio’s is 7.9%.
Desperate sellers, buyer’s market
The steeper discounting comes as the housing market has been frozen for much of the past three years after rate hikes from the Federal Reserve in 2022 and 2023 sent borrowing costs higher, discouraging homeowners from giving up their existing ultra-low mortgage rates.
But the dearth of new supply kept home prices high, shutting out many would-be homebuyers who were also balking at elevated mortgage rates.
With demand weak, the housing market has been shifting away from sellers and toward buyers. The pendulum has swung so far the other way that delistings soared this year as sellers became fed up with offers coming in below asking prices and took their homes off the market.
By one measure, this is the strongest buyer’s market on record. In October, sellers outnumbered buyers by 36.8%, the largest such gap in Redfin data going back to 2013. The mismatch amounts to 528,769 people.
The number of buyers fell 1.7% to the second-lowest level ever because of high housing costs and economic uncertainty, Redfin said last week. The tepid demand sent the number of sellers down 0.5%, marking the fifth straight decline and hitting the lowest level since February.
Matt Purdy, a Redfin Premier real estate agent in the Denver area, said some homeowners need to sell due to a new job or a divorce. While sellers want top dollar, buyers are focused on getting a low monthly payment, and there’s a shortage of house hunters.
“Oftentimes the buyer ends up winning the negotiation because they have options—there are a lot of sellers who are desperate to make a deal happen,” he said in a statement last week.