If anyone was listening to all the pundits claiming that the real estate market has bottomed out, Trulia today announced that 23.6 percent of current homes on the market in the United States have experienced at least one price cut, totaling $27.4 billion in reductions. The average price-reduced home has seen a listing price reduction of 10.6 percent.
The luxury homes sector has been particularly hard hit – 24 percent of homes with a selling price greater than $2 million are seeing price reductions compared to 23.6 percent of homes on the market for the less than $2 million. While the percentage of homes seeing discounts are almost identical, discounts on luxury homes are significantly more with 14.3 percent being slashed off the original listing price compared to only 9.7 percent of homes under the $2 million dollar price tag. Unfortunately, many of these unsold homes will end up as bank foreclosures.
Major metropolitan areas continue to see the greatest reductions. Of the top 50 cities in the U.S. based on population, 33 have seen 25 percent or more of home listings reduced in price, higher than the national average of 23.6 percent. U.S. cities that have seen at least 30 percent of homes reduced in price include
- Jacksonville, Florida – 36 percent
- Tucson, Arizona – 32 percent
- Boston, Massachusetts – 32 percent
- Los Angeles, California – 32 percent
- Columbus, Ohio -31 percent
- Dallas, Texas – 31 percent
- Honolulu, Hawaii – 31 percent
- Minneapolis, Minnesota – 31 percent
- Austin, Texas – 30 percent
- Washington, DC – 30 percent
- Baltimore, Maryland – 30 percent
- Las Vegas, Nevada – 30 percent
Unsurprisingly, the markets that have seen greater than average price reduction are those suffering the worst overbuilding during the boom years, although the demise of General Motors and Chrysler may have something to do with Detroit being number one on the list with average price reductions of 23 percent. Las Vegas, Miami and Los Angeles are next.
Charts are avialable here. Trulia
