Prices Cut On One Listed Home in Four

More than one-quarter of all nondistressed homes for sale in the U.S. have seen at least one price cut since going on the market, at an average discount of 10 percent off the listed price, the real estate data firm Trulia Inc. reported today.

It all adds up to a total of $28.4 billion in markdowns off the original listing prices for U.S. homes, according to Trulia's monthly survey. It marks the fourth month in a row where more than 25 percent of homes on the market have seen at least one price reduction.

Over one-third of the $28.4 billion in price reductions were accounted for by just three states - New York, California and Florida. Overall, the biggest price cuts were in western states, where foreclosures have taken a heavy toll, with seven of the 10 states with the biggest average price cuts. Nevada, Idaho, Arizona, Wyoming, Hawaii, Utah and California have seen an average reduction of 13 percent in list prices.

The highest percentage of homes with price reductions, however, tended to be clustered in the Northeast, which had five of the 10 states with the highest rates of reductions. In Massachusetts, Rhode Island, Connecticut, New Hampshire and New Jersey, one listed home in three has seen at least one reduction.

Luxury homes take biggest hit

Luxury homes, those priced at $2 million and above, bore the biggest brunt of the markdowns, with an average price reduction of 14 percent. They accounted for 25 percent of the total markdowns, approximately $7 billion, despite making up only 2 percent of all listings.

"Interest in real estate typically wanes at the end of the year, which means that sellers who didn't aggressively price their homes may find themselves making difficult decisions to reduce their prices or delay the sale until interest piques again in January," said Pete Flint, Trulia CEO. "We are seeing the beginning of this trend in the Northeast and Western United States with discounting happening at all price points, and expect it to continue."

More than one-third of properties reduced in many cities

Five cities shared the top spot in price reductions, with Memphis, Minneapolis, Portland (Ore.), Indianapolis and Baltimore all with 36 percent of listed homes taking at least one price reduction, with reductions averaging 9-11 percent. Close behind were Milwaukee and Jacksonville (Fla.), at 35 percent. A total of 16 metropolitan areas surveyed had markdowns on 30 percent or more of their listed properties.

The biggest increase in markdowns was in Kansas City (Mo.), which saw a 50 percent jump in price reductions from the previous month. Colorado Springs saw a 32 percent increase, while Louisville and Indianapolis each saw a 27 percent increase in listed properties with price reductions.

The monthly report is based on the state of the U.S. housing market as of Oct. 1. The report does not include foreclosed properties. The monthly survey is based on information obtained from real estate brokers, agents, third party aggregators and multiple listing services.