REAL ESTATE TOPICS...Where Is A “Bargain” Really A Bargain?

Homes advertised as a bargain aren’t necessarily a good deal. Only 55 of the 100 biggest U.S. housing markets where properties described as a “bargain” are actually listed for a lower price

By Ralph McLaughlin | January 7, 2016

The B-word – bargain – gets thrown around a lot in the real estate world. Buyers are looking for one, and sellers often use the term to market their home. But talk is cheap, so we’ve combed through all the homes for sale on Trulia in the 100 largest housing markets to find out where properties listed with the word bargain, or similar words, are actually priced at a discount. To no surprise, we found that not all properties listed as bargains are actually a good deal.

In fact,

• Homes listed for sale with the term “bargain” (or similar) in their description are offered for a lower price compared to other listings without such terms, in only 55 of the largest 100 U.S. housing markets;
• Markets with the largest discount on bargain properties are in the Bargain Belt, where markdowns range from 10-20%;
• Markets with the smallest discount on bargain properties are mostly along the Costly Coasts, where price cuts range from just 2-4%.

Bargain Discount Highest in Bargain Belt, Lowest on Costly Coasts

Homebuyers in Midwestern and Southern markets – a region we collectively call the Bargain Belt – are more likely to find that properties described as a bargain actually come with a discount. Of the top 10 housing markets with the largest discount, five are in the Bargain Belt. Dayton and Toledo, Ohio, lead the pack, where, on average, bargain properties come with a 19.6% and 18.1% markdown, respectively. On the median priced home, this translates to a $22,900 price cut in Dayton and $19,848 cut in Toledo. Knoxville, Tenn., Buffalo, and Omaha, Neb., round out the top five, where price reductions range from 11.5%-12.8%.

Top 10 Housing Markets with Largest Discount on Bargain Properties
#	U.S. Metro	Discount %	Median Listing Price, Jan. 2013 – Dec. 2015	Example Discount on Median Listing Price
1	Dayton, OH	19.6%	$116,900	$22,900
2	Toledo, OH	18.1%	$109,900	$19,848
3	Knoxville, TN	12.8%	$169,900	$21,831
4	Buffalo, NY	12.4%	$138,888	$17,186
5	Omaha, NE	11.5%	$159,000	$18,267
6	Baltimore, MD	11.3%	$265,000	$29,857
7	New Haven, CT	11.0%	$249,900	$27,543
8	Camden, NJ	10.5%	$199,900	$20,982
9	Madison, WI	10.5%	$239,300	$25,062
10	Fairfield County, CT	10.4%	$535,000	$55,593

On the other hand, seven of the 10 housing markets with the smallest discount are along the Costly Coasts. Riverside, Calif., comes to the bottom of the list, where bargain properties will get you just a 2.1%, or $6,480 discount off the median priced home. Homebuyers looking for bargain digs in the Pacific Northwest will only get a 2.8%, or $11,685 markdown, in Seattle and a 3%, or $9,238 cut in Portland, Ore.. Rounding out the bottom five are Orange County, Calif., and Montgomery-Bucks-Chester County, Pa., with a discount of 3.3%.

Top 10 Housing Markets with Smallest Discount on Bargain Properties
#	U.S. Metro	Discount %	Median Listing Price, Jan. 2013 – Dec. 2015	Example Discount on Median Listing Price
1	Riverside-San Bernardino, CA	2.1%	$310,000	$6,480
2	Seattle, WA	2.8%	$419,950	$11,685
3	Portland, OR	3.0%	$312,000	$9,238
4	Orange County, CA	3.3%	$725,000	$23,954
5	Montgomery County-Bucks County-Chester County, PA	3.3%	$324,900	$10,815
6	Houston, TX	3.5%	$249,900	$8,661
7	Worcester, MA	3.5%	$239,900	$8,388
8	Dallas, TX	3.9%	$265,000	$10,295
9	Denver, CO	3.9%	$350,000	$13,680
10	Washington, DC	4.0%	$429,990	$17,274