National Price Reductions Fall Below 20%: Trulia

With the ""buy-now"" attitude fading, national home price reduction levels continued to decrease this month, according to a recent report by San Francisco-based ""Trulia, Inc."":http://www.trulia.com/, a real estate search engine.

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As of March 1, 2010, 19 percent of listings on the market had experienced at least one price cut, falling 10 percent from the previous month to the lowest level since Trulia began tracking price reductions in April 2009. The average discount for price-reduced homes held steady at 11 percent off of the original list price, but the total dollar amount slashed from home prices dropped to $21.6 billion.

Of the top 50 major U.S. cities tracked by Trulia, the biggest month-to-month decline in price reductions was seen in Charlotte, North Carolina, where the number of price-reduced homes fell from 29 percent in February to

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21 percent in March. The lowest percent of price reductions was found in San Jose, California and Fresno, California, both posting only 12 percent of listings with reduced prices. At 33 percent, Milwaukee had the highest percent of listings with slashed prices.

Price reduction levels peaked at 26 percent from September through November last year, corresponding to the timing of the original November 2009 deadline for the homebuyer tax credit. However, in the months following the extension of the credit, price reduction levels have steadily declined. With deadline of the extended and expanded homebuyer tax credit approaching, it is possible that home price reductions may surge once again.

""Home sales have dropped nationally during the past few months because there has been a lower sense of urgency to ‘buy now,'"" said Pete Flint, Trulia co-founder and CEO. ""As we get closer to the government incentives running out, we expect price reductions to increase as sellers begin to feel the pressure to lure buyers in, in advance of the tax credit expiration.""

Despite the overall decrease in price reductions, homes listed at $1 million or higher continued to be discounted at high levels. According to Trulia's report, the average amount slashed from these properties was 14 percent off of the original list price, and luxury homes in some cities saw an even higher discount. In Columbus, Ohio, million-dollar homes were discounted 35 percent, and prices of luxury homes in Mesa, Arizona were cut by 22 percent.