At Least A Quarter Of Home Sellers Have Cut Prices

Twenty-five percent of people with homes on the market as of August 1 have cut the prices of their homes at least once according to real estate research firm Trulia.

The trend has lasted four months. According to Trulia, “The total dollar amount slashed from home prices in America’s 50 largest cities was $30.1 billion, and the average discount on price-reduced homes continued to hold at 10 percent off of the original listing price.”

Price cuts continued to be high in Nevada and the Southwest. The news in one in a long line of confirming statistics that show prices are being dropped on homes and inventory is rising. Part of this is undoubtedly due to unemployment. Part can be blamed on the expiration of government tax cuts and the failure of the HAMP foreclosure prevention program

Another significant cause is the 11 million homes with underwater mortgages. The Trulia data show that these numbers will grow as price cuts put more mortgages out of the money, forcing those who want to sell homes to make payments to their banks to close a transaction. Housing, many analysts and federal authorities believed, was to start to improve in the second half of this year. Not likely.

Douglas A. McIntyre

The following U.S. cities experienced the biggest increases in price reductions from July 1, 2010 to August 1, 2010: