Foreclosures Lead to Greater Price Cuts

Nearly a quarter of homes currently for sale in the United States have experienced at least one price cut, according to a ""report"":http://info.trulia.com/index.phpxs=43&item=65 released Friday by ""Trulia, Inc."":http://www.trulia.com, a San Francisco-based real estate company that tracks home prices in local communities across the country. All in all, the company said sellers have slashed prices by $27.4 billion, with the average price-reduced home seeing a discount in its listing price of 10.6 percent.
Trulia says sellers in the areas hardest hit by foreclosures are slashing prices the most. While the national average for price reductions is 10.6 percent, they company reports that sellers in Detroit drop their asking price by an average of 23 percent. In Las Vegas, the typical price reduction is 16 percent, and in Miami, its 15 percent. Phoenix and Mesa, Arizona are also experiencing deep price reductions, with 13 percent slashed off the original listing price.
Major metropolitan areas continue to be hit hard by price reductions. Trulia reported that 33 of the nation's 50 most populated cities, have seen 25 percent or more of their home listings reduced in price, higher than the national average of 23.6 percent. Based on ""Trulia's market data"":http://info.trulia.com/index.phpxs=43&item=65, the cities with the largest percentage of homes listed at a discount include:
  1. Jacksonville, Florida - 36 percent 
  2. Tucson, Arizona - 32 percent
  3. Boston, Massachusetts - 32 percent
  4. Los Angeles, California - 32 percent
  5. Columbus, Ohio - 31 percent
  6. Dallas, Texas - 31 percent
  7. Honolulu, Hawaii - 31 percent
  8. Minneapolis, Minnesota - 31 percent
  9. Austin, Texas - 30 percent
10. Washington, DC - 30 percent
11. Baltimore, Maryland - 30 percent
12. Las Vegas, Nevada - 30 percent
Pete Flint, Trulia co-founder and CEO, commented, ""Summer time is the peak season for buying and selling, and with some of the lowest prices in the last decade, we expect to it be a busy season. Everyone wants to think they are getting the best deal available and price reductions are helping to spark a renewed interest in the U.S. real estate market.""
Trulia notes that the luxury market is not immune to the recent flurry of price cuts. The company says 24 percent of homes with a selling price greater than $2 million are seeing price reductions, compared to 23.6 percent of homes for under $2 million. While the percentage of homes seeing discounts are almost identical, Trulia points out that discounts on luxury homes are significantly more, with typically 14.3 percent being slashed off the original listing price.