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The combination of a down economy and high levels of housing inventory has put sellers at a disadvantage as home prices have continued to drop throughout the summer.
[IMAGE]According to a report released Wednesday by ""Trulia"":http://www.trulia.com/, 24 percent of listings on the market as of July 1, 2010 experienced at least one price reduction, a 9 percent increase from the previous month. The total dollar amount slashed came in at $27.3 billion, and the average discount for price-reduced homes continued to hold steady at 10 percent off of the original listing price.
""Sellers are feeling the heat this summer as the economic recovery simmers down and home inventory levels climb,"" says Pete Flint, co-founder and CEO of San Francisco-based Trulia. ""We're seeing more and more sellers reduce their home listing prices to attract potential buyers, who definitely have the upper hand in negotiations this season. The slow start to the summer season is a major concern that we are heading towards a double-dip in the second half of this year.""
Trulia said many of the largest U.S. cities saw significant increases in price reduction levels, as 22 of the top 50 cities across the nation experienced price reduction levels at 30 percent or more, compared to just 10 cities the month prior.
Minneapolis once again led the way with 40 percent of its home listings experiencing at least one price cut. Trulia said this marked the third straight month that Minneapolis has held the top spot, and the company noted that no other city has reached the 40 percent mark since it began tracing home price reductions in April 2009. With an average discount for price-reduced homes at 9 percent, the city's total dollar amount cut from home prices was $30.1 million.
On a regional basis, the West led the nation with price reduction increases. While cities in the Western region experienced a decrease in price cuts during the first half of this year, things were different this month, as these same cities experienced some of the largest upticks in price reductions compared to the previous month.
According to Trulia, price reductions in Oakland surged 38 percent from the month prior, and San Diego saw price cuts soar by 25 percent. Additionally, Honolulu experienced a 21 percent increase from one month to the next, and price reductions in Las Vegas jumped 20 percent.
Regardless of location, Trulia found that the luxury market was hit the hardest, as price reduction levels for homes listed at $2 million and above continued to provide large discounts. Trulia said an average of 14 percent was slashed off of the original listing price of these homes, compared to the average discount of 9 percent for homes priced less than $2 million.
