National Association of Realtors® (NAR) Chief Economist Lawrence Yun recently wrote in a LinkedIn post that “It’s common knowledge that the longer a property is on the market, the larger price cut it takes to get the deal done.”

That’s becoming a larger issue in the local market. Last month, 44% of the homes that sold saw a price reduction from the original listing price. The share has increased from the low 33% of homes sold since the first of the year.

Yun says there is not a stable rule of thumb for how much of price cut is required to spark additional interest but adds here’s what happening across the country.

“For a home sitting on the market for 90 days, an average price cut of nearly 7% is needed to get it under contract. Another 2% cut is required to get to the closing table.”

The national scenario for homes on the market 31 to 60 days is an initial price cut of 4.9% to the active listing, 5.6% to the pending contract and 7% to the closing table. That’s closer to what we’re seeing here in the Tri-Cities, but the average reductions are higher.

Last month, the median time on the market for the Tri-Cities region was 61 days. That accounts from the time a property was listed until it closed.

Here in the Tri-Cities region, the average price reduction last month was $31,878 and there was another average of $15,332 to get to closing.

The price reductions have not cut into the year-to-date price appreciation this year so far. In September it was up 4.3% from last year.

OUTLOOK – It’s likely that sellers will relax median listing prices, which have been on an upward trend this year. Lower mortgage rates and an increase in inventory have bettered conditions for buyers even though sales have continued retreating toward a pre-pandemic level.