One in four homes on the market as of Aug. 1 had its asking price reduced at least once, although price reductions were smaller on average in July than June, according to an analysis by real estate search site Trulia.
It was the third straight month that the percentage of listings subjected to price reductions grew, Trulia said.
The percentage of listings that saw price reductions exceeded the national average in 33 of the 50 top housing markets, including Jacksonville, Fla., where 38 percent of listings had seen price reductions; Portland, Ore. (35 percent); Milwaukee, Wis. (34 percent); Boston (34 percent); Seattle (34 percent); Albuquerque, N.M. (33 percent); Chicago (33 percent); Indianapolis (32 percent); and Raleigh, N.C. (32 percent).
Price reductions averaged 10 percent from the original listing price in July, compared with 10.6 percent in June, Trulia said. Luxury homes — defined as those priced at $2 million and above — tended to take a bigger hit, with an average reduction of 14 percent.
Pierre Calzadilla, Trulia’s manager of industry relations, said sellers are better off setting a listing price under the market to encourage demand and competition than to overprice it.
While sellers and their real estate agents may agree to disagree on an initial listing price, a presigned price reduction is advisable to ensure that if a price cut is necessary it’s done quickly, he said.
"If you don’t correct your price immediately, you may end up on a slippery slope, chasing the market down," Calzadilla said in a statement.
According to a recent analysis by Zillow, foreclosure resales made up 22 percent of all home sales in June, and about 29 percent of homes sold for less than their owner originally paid.
Zillow’s Home Value Index showed the median home value down 12.1 percent during the second quarter compared to the same time a year ago, and 22.3 percent from the market peak (see story).
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