photo credit: lepiaf.geo

Our November home price reduction report shows 25.6% of U.S. homes as of November 1, 2009 have experienced at least 1 price cut of their original asking price during the last 12 months. The total amount slashed off of active for sale listings by home sellers is $28.1billion. The average national price reduction remains 10%. Over 40% of the top 50 metros around the U.S. have price reduction levels above 30%, much higher than the national average.

November Price Reduction Highlights

• 25.6% of U.S. homes as of November 1, 2009 have experienced at least 1 price cut of their original asking price
• $28.1 Billion in price reductions
• Average national price reduction remains 10%
• Minneapolis, Minnesota leads the nation in price reductions for the 1st time with 39%
• Luxury homes priced $2 million plus seeing an average of 14% cut vs. the national average of 10%
• Luxury homes over $2,000,000 on Trulia = 2% but = 25% of the $28.1 billion in home price reductions

Northeast Continues With Most Homes Reduced

The Northeast continues to see the highest level of price reductions, with 29 percent of current listings experiencing at least one price cut—Connecticut, Massachusetts, Rhode Island and New Hampshire are all seeing over 30 percent of listings with price reductions. (Regions according to the U.S. Census Bureau)

• Northeast- 29% of listings with price reductions
• Midwest- 28% of listings with price reductions
• West- 25% of listings with price reductions
• South- 24% of listings with price reductions

“With mortgage rates still low and the expansion of the tax credit to trade-up buyers, we could see significant inventory—both new and “shadow inventory”—hit the market during the next four-to-six months,” said Pete Flint, Trulia co-founder and CEO.  “Inventory levels this quarter are poised to be atypical of a normal real estate market, which could create tremendous pressure on sellers to price their homes competitively and move their property before the tax credit expires on April 30^th.”

Cities experiencing significant increases in percentage of listings with price reductions from June 2009 to November 2009 include:

• Kansas City, MO – 59% increase in price reductions
• Colorado Springs, CO – 43% increase in price reductions
• Omaha, NE – 39% increase in price reductions
• Louisville, KY – 37% increase in price reductions
• Milwaukee, WI – 30% increase in price reductions

Cities showing signs the highest percentage of declines for listings with price reductions from June 2009 to November 2009 include:

• Las Vegas, NV– 34% decrease in price reductions
• San Jose, CA – 25% decrease in price reductions
• San Antonio, TX – 18% decrease in price reductions
• Los Angeles, CA – 16% decrease in price reductions
• Oakland, CA – 16% decrease in price reductions

Luxury Market Still Hardest Hit

Luxury homes (those listed at two million dollars and above) continue to bear the brunt of discounts being offered with an average of 14 percent being slashed from the original asking price compared to the national average of ten percent. Additionally, luxury homes represent less than two percent of all current listings on Trulia, but are responsible for 25 percent of the $28.1 billion in home price reductions.

November Price Reductions – Top 50 U.S. Cities

For more info on Trulia’s national home price reduction report, please visit our press release in the Trulia News Room

And so when Mayor Newsom wanted to find out which data should be included on the site, he turned to the Trulia Voices community with his inquiry:

The Mayor’s question received answers from almost 100 members of the Trulia Voices community. 58% of the responses came from California residents and 31% from those who reside in San Francisco. Though the answers were wide-ranging, there were definitely some commonalities among the requests for information.

Crime data, proximity to points of interest and school information topped the list on a national level. These features were important to San Francisco residents as well, however those in SF differentiated themselves from the group at large with numerous requests for information about access to transportation and street parking, indicating a clear need to navigate the city with ease. San Francisco dwellers were also more likely than others to request information about parks, verifying the outdoorsy culture that is prevalent in the city.

“Since the launch of DataSF.org a couple weeks ago, we’ve had nearly 10,000 visitors from 104 countries and every state in the nation,” said the Mayor, “Thank you for taking the time to suggest ways to improve San Francisco and what additional data you want to see on the site.”

From the looks of it, the Mayor has taken these suggestions seriously. DataSF.org already boasts crime statistics, transportation data as well as information about recreation and park lands. They’ve also already tackled another common request from San Francisco residents:

“We are working city departments to make as much non-confidential government data available on DataSF as possible,” he said. “With that in mind, I am pleased to announce that we have just released the most requested dataset on DataSF - our street sweeping schedule. We look forward to seeing how this and other data is used in ways to make government work better for all of us.”

Here are the details of the tax credit extension/expansion that the House and Senate have passed (HR 3548)

• First-timers: Extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. Previously was set to expire after Nov. 30. First-time homebuyer is defined as someone who has not owned a residence within the past three years.

• Existing owners: $6,500 credit for those who buy a home after living in their current house at least five of the last eight years.

• Extension: Contracts signed by April 30 and closed by June 30.

• Home requirement: principal residences priced at $800,000 or less.

• Income limits: Single $75K –>$125,000, Joint $150K–>$225,000 for joint filers.

• Cost: $10.8 billion over 10 years, according to the Joint Committee on Taxation.

The final step is el Presidente’s John Hancock on the bill, which the White House says will come tomorrow.  Stay tuned…

Reggie Bush, running back for the New Orleans Saints AND currently ON again with Kim Kardashian, lists his 4 bedroom, 5.5 bath urban oasis located at 1501 Viewsite Terrace, Los Angeles, CA 90069 with explosive 360 degree jet liner views spanning the city and beyond. Set along the sunset strip, the pad includes a personal elevator, outdoor plasma tv’s (if watching indoors isn’t good enough), glass pocket doors (so you can have a view at all times) and a master suite on its own floor (for maximum privacy). Reggie, are you moving in with Kim?

And the home of DJ AM, who passed away of a tragic accidental drug overdose, located at 9918 Anthony Place, Beverly Hills, CA 90210, is listed on the market as well. It may be situated in a more private area of LA, but it’s definitely not lacking any pizazz. The 4bd, 4.5ba boasts rich mahogany floors, custom built-in theater, two-sided fireplace and a lush landscaped backyard with pool and spa. Can you imagine how many pool parties he must have hosted? We’ll miss you dearly DJ AM - RIP.

Everyone has heard about the Google Page Rank and algorithms that Google uses to rank their search results. Individuals and businesses spend a considerable amount of effort to understand what it takes to climb up the rankings. Therefore, it didn’t come as a surprise to me that we’ve started to receive an increasing number of questions about how we rank or prioritize real estate listings in the Trulia search results. I take this volume of questions as a positive sign of Trulia’s growth and ability to drive meaningful results to our partners. That is why I think it is important to address this question here on our blog.

First, while the exact details of ranking listings involve complex algorithms, the principles we follow are simple:

Associate each listing (along with the home buyer inquiries from that listing) with the actual listing agent or broker, not to the highest bidder or a random third party.
Since the very beginning, we’ve always followed the simple mantra of “your listing, your links and your leads.” Unlike some third party (e.g., online lead generators with a broker license and thus access to MLS IDX listings) or broker operated IDX listing web sites, Trulia has always credited and linked to the actual listing agent (or broker or franchisor) web site from the listings in our search results. There is no bidding or auctioning of leads from Broker A’s listings to Broker B. We think this creates the best consumer experience; who would know a home better than the actual listing agent who has been at the house with the home seller. Of course, we realize that consumers can benefit from a buyer’s agent during the purchase process, but we want to provide a direct connection between the consumer and the best source of information for each listing.

Build the best-in-class consumer experience in online real estate.
We track consumer behavior religiously on our site and know what type of listings they gravitate towards in each search (hint: they like more photos!). To meet their needs, the initial search results (aka “the default ranking”) that consumers see before any custom sorting are ranked to surface the best content first.

Build the most partner-centric company and cost efficient online advertising solution in the industry.
This may sound contrary to the principle number one, but it isn’t. By surfacing content and listings that consumers want to see first, we ensure that the exposure listings receive is highly valuable. We do not “force” home buyers to sift through dozens of listings they are not interested in even though it could artificially increase our page views.  Our goal is to maximize the real value we deliver to our partners.

Of course, our quest for excellence is never ending. The principles above haven’t changed over time, but our knowledge of user and partner behaviors has changed and does impact the exact way we prioritize listings.  Since the algorithm is constantly updated and involves a bunch of long mathematical equations, it’s best to focus only on the most important factors that positively affect both listing ranking and how we select the right listings source if we receive one listing from multiple sources:

• More listing data (especially multiple pictures, agent emails, descriptions and open house information) attracts more consumers and thus increases listing ranking on Trulia. More data = more leads.
• Fresher content, which means newer listings and more frequently updated feeds, increases exposure. Fresher listings = more leads.
• We apply the same principles to “paid listings,” too. The more likely a consumer is to click a listing, the higher it appears even in “featured” results. Premium listings with the best data = most leads.

Essentially, the cream rises to the top and the least comprehensive listings are most likely to be found on the bottom.

Now that you know the secret to gaming Trulia’s search results – making consumers happy - make it happen!

• $8K tax credit — amount remains the same for first time home buyers
• Extension — will be for sales contracts entered into by April 30, 2010, and escrow closed in 60 days
• Homeowners included — $6.5K tax credit for existing home owners as long as they’ve been in their homes for 5 consecutive years in the past 8 and meet the income limits
• Income limits increased — Single $75K–> $125K and Married $150K–>$250K$225K (updated by CQ, 10:41 am PT)
• AND - the White House endorsed the plan a few hours ago this morning.

My questions:
1) Why extend this to “step-up” buyers? Ultimately, I’ve read that something like 97% of all Americans fall into the income limits.  Assuming that 60% of them are homeowners, then roughly 58% of all Americans can potentially qualify.  How much is this going to cost?

2) Will this bring more instability to home prices as the flood gates are now open on this tax credit — this bill is looking more and more like the “cash for clunkers” program.  If inventory moves thanks to this stimulus, will we experience a drop off in demand come April 30, and resulting dip in home prices?

As far as I can tell, it’s unclear how this proposal will move — as an amendment to the unemployment insurance legislation (HR 3548) or as a stand alone bill.  No matter how it progresses, in order to be effective, the plan must stabilize home prices, drive increased spending for consumer products and help revive communities faced by foreclosure.  Once those three areas are addressed, we’ll have a much healthier market.

We’ll keep you posted!

Given the fluid nature of Congress, who knows what the final proposal that hits the Senate–>House–>Obama’s desk will look like.  But today’s Reid/Baucus plan which includes an extension of $8K credit to the end of 2010, with a $2K/quarter phase out starting March 2010 seems to make the most sense.

Here’s why:

1) Stability - there is little debate on whether the tax credit has been successful in spurring sales and contributing to what looks like a stabilization in home prices nationally.  Real estate was the first plank in the stool to fall with this economic downturn, and it will take a real estate recovery to stabilize the overall market.   This bodes well for the economy.

2) Foreclosures - the glut of foreclosures across the country has driven down home values across communities.  These are trashed homes that are now being purchased for cash by investors, updated, and ultimately sold to first-time home buyers.  We all know the negative externalities like vandalism and crime are tremendous and the only thing that will reverse this trend is home buyers invested in these homes and communities to bring values back.

3) Consumption - Trulia conducted a study last year which showed that consumers on average, spend $30K within the first six-months of their home purchase.  New homeowners buy furniture, paint, rugs, lawnmowers, hot water heaters, kitchen appliances and tiles, etc.  This spending contributes to stimulating the economy and ultimately job creation around the whole ecosystem of housing.

But government actions are always paired with warning:

- Let’s phase out the tax credit, and not stop it cold turkey.  Lessening the dependency on the tax credit will help avoid a major drop in prices.  The economy is generally on a recovery path - over a long enough period of time, withdrawal of the tax credit will be countered with increased spending power from the individual and decreased unemployment.

- Congress needs to be wary of too aggressively expanding the program.  What we don’t want to see is a drop off, like we did with the cash for clunkers program — where people who were planning to buy a car rushed to jump in and take advantage of the stimulus, then promptly dropped off leaving sales where they were before the program began.

- Now that the tax credit can be used for down payments, 1st time home buyers should not be tempted to buy a house beyond their means.  That would only put us back into what caused this mess to begin with.

What do you think?

As a company, we have multiple important users. We not only have a large audience of consumers, we also have a large number of agents and brokers that use Trulia to help them achieve their business goals. Agents get introduced to new home buyers and sellers, and we are delighted to hear success stories from agents and consumers every day. We also have advertisers who are interested in promoting their products to our audience, and shareholders and investors who are looking to build a profitable and sustainable business. All these groups are very important to us and we work hard to make them as happy as possible.

Every decision made considers the needs of multiple constituents (consumers, agents, brokers and our employees and shareholders). Every online real estate company knows that it is a balancing act between delighting the consumer and managing the interests of many participants in the real estate ecosystem to build a successful service. To manage this process and constituents, we use a simple prioritization, which we have stuck to from inception. Our first priority is the end consumer; our primary focus day to day is delighting the home buyer, seller or home owner. We’re constantly building tools and services to improve the website and invest millions of dollars a year in improving our technology to figure out how to make these consumers happier.

Next in our order of priority is the real estate community: agents, brokers, franchisors and advertisers.  Our goal has been and continues to be to be the most customer centric company in the industry. We are focused on making agents and brokers happy when they come to the site by delivering a great range of free and premium tools. We have always believed that Agents and Brokers are essential to the current and future real estate process and we will continue to build products that they ask for and help them connect with consumers. While not everyone likes to be #2 in priority, I speak to many agents and brokers and while they are also focused on building their businesses and watching the bottom line, they tell me that their number one focus is delighting the home buyer and seller as well. They say that’s the best way to ensure great repeat business and to build their franchises. Sure agents and brokers want what’s best for them, but they recognize that they can be better business owners and ultimately more successful by focusing in on what’s best for the end consumer. The same goes for Trulia.

Third in our priority list are our investors, shareholders and employees who are all part owners of Trulia. We have an amazing group of employees and investors who have been with us along our short life.  While we are laser focused on making our people happy, we are also a commercial enterprise that must generate a return for our shareholders. We don’t ignore our investors, but we think that they best way to make them succeed is to make our users (consumers and the real estate community) happy – which, I’m happy to say, is what our investors think too.

Ultimately we think that our relentless focus on making our users really happy and sticking to our focus on consumer first, real estate community second and shareholders third will help to turn Trulia into a resounding long term success.

So send us your feedback; we carefully read every single item of feedback so that everyone at Trulia can help to make you happy.

Today is National Breast Cancer Awareness Day, part of the larger Breast Cancer Awareness month.  Breast cancer affects many women and their families; a woman has a 1 in 8 risk of developing breast cancer during her lifetime.  And that’s exactly why Trulians are doing our part to raise breast cancer awareness and to support Susan G Komen for the Cure.

For every Trulia Pro premium marketing subscription purchased through the end of the month, Trulia will donate the first month’s fee to Susan G Komen for the Cure.  Just use code PINK at billing to make sure your money is donated to this fantastic organization.  In addition, Trulia has donated on-site ad space to the cause and has launched an employee donation program.

Other ways you can do your part to support breast cancer awareness and help find a cure:

• Donate to a national cancer non-profit or to a local cancer treatment center
• Encourage women to check with their doctors about when to begin regular mammograms - then to have them!
• Write your member of Congress to say that early detection and treatment programs be included in any national health care legislation.

I’m happy to say that my mom is a breast cancer survivor.  Let’s all do our part to make sure more women are survivors, too.

Agents: what other causes do you support in your local area?