The Twin Cities ranked seventh among the 50 largest cities in the U.S. in terms of the share of reduced-price listings, with 34% of for-sale listings in the 13-county metro area [seeing] price reductions as of Sept. 1. The size of the average price reduction in the Twin Cities was 9 percent.
--Chris Snowbeck, "Twin Cities a Hotbed of Discounted Homes this Season"; Pioneer Press (9/12/09)
Snowbeck's article does a nice job summarizing the mindset of home sellers faced with discounting their asking price to get a deal. Locally, that anxiety definitely kicks up after Labor Day, as Sellers contemplate cooler weather, and the seasonal slow-down that comes with it.
That's particularly true for homes that have been on the market since Spring (or before!).
Snowbeck also quotes me, and cites the Minnetonka home I've been discussing the last week or so for its serial price reductions.
My take on price reductions is that, while they can show Seller motivation, they don't necessarily tell you if a home is well-priced ("Cheaper -- Not Necessarily Cheap"). That's because the initial asking price could have been inflated.
When it comes to establishing value, only three things matter: the comp's, the comp's, and the comp's.
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