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Housing's fire sale continues

by Broderick Perkins

(07/20/2010) As of July 1, 25 percent of listings on the market, experienced at least one price reduction, as sellers went after buyers with a vengeance.

That's a 9 percent increase from the previous month according to Trulia.com the real estate search engine reporting the news.

And, buyers? Take note.

The average discount for price-reduced homes continued to hold at 10 percent off of the original listing price.

That's a cool $50,000 off a $500,000 home for sale.

Many of the largest U.S. cities saw significant increases in price reduction levels. Twenty-two of the top 50 cities across the U.S. experienced price reduction levels at 30 percent or more, compared to just 10 cities in the previous month.

Trulia reported Minneapolis led the way with 40 percent of its home listings experiencing at least one price cut in the third straight month that Minneapolis has held the top spot. No other city has reached the 40 percent mark since Trulia started tracking home price reductions in April 2009. With an average discount for price-reduced homes at nine percent, the city's total dollar amount slashed from home prices was $30.1 million.

Buyers are getting cocky.

"Sellers are feeling the heat this summer as the economic recovery simmers down and home inventory levels climb," said Pete Flint, co-founder and CEO of 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," Flint said.

The West is price point king.

Oakland saw the volume of price reductions increase by 38 percent month-over-month and San Diego saw reductions increase by 25 percent. Honolulu experienced a 21 percent increase from the previous month and Las Vegas increased by 20 percent.

Texas cities also saw significant increases in price reductions with San Antonio and El Paso increasing by price 21 percent and 20 percent respectively.

Price reduction levels for luxury homes (those listed at $2 million and above) continue to provide large discounts with an average of 14 percent off of the original listing price, according to Trulia.

 

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