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Home sellers in US cut prices by US$28.4 billion, says Trulia

LOS ANGELES: US home sellers cut their asking prices by a total of US$28.4 billion (RM96 billion) to attract buyers as the real estate recovery stalled, Trulia Inc said.

The average discount was 10% as of Oct. 1, the San Francisco-based real estate data provider said on Oct 8. Homes listed for more than US$2 million cut the most, with owners taking an average of 14% off the original price. Luxury homes accounted for 25% of all of the reductions.

Sales of existing US homes unexpectedly fell in August for the first time since March, according to the National Association of Realtors, signaling the recovery will be slow to gain speed. The median price dropped 12.5% from August 2008.

“Consumers have to be slashing the prices of the homes they list,” Pete Flint, chief executive officer of Trulia, said in an interview. There’s a “significant inventory” of homes for sale. “You’re still going to see further price declines before the market stabilises in 2010.”

Half of the 10 states with the highest percentage of discounted homes are in the Northeast: Massachusetts, Rhode Island, Connecticut, New Hampshire and New Jersey. A third of residences for sale in those states were reduced at least once, Trulia said.

New York, California and Florida accounted for 35% of the total value of price cuts nationally. In Nevada, Idaho, Arizona, Wyoming, Hawaii, Utah and California, sellers have dropped an average of 13% off the original price, according to Trulia.

Closely held Trulia collects data from brokers and agents, third-party providers and multiple-listing services. For the survey, it looked at homes for sale as of Oct. 1 -- about three million properties, excluding foreclosed homes and undeveloped land -- and calculated how many had previously been listed for a higher price. Some were lowered more than once.

Among the 50 largest US cities, those with the biggest percentage of discounts were Memphis, Tennessee; Minneapolis; Portland, Oregon; Indianapolis; and Baltimore, according to Trulia. Prices were cut on 36% of homes for sale in those cities. Baltimore had the biggest discounts of that group -- an average of 11%.

According to a separate survey released on Oct 8 by real estate data service Zillow.com, US buyers paid a median US$6,525, or 3%, less than the final listing amounts on properties bought in August.

Buyers in the Vero Beach, Florida, area had the most negotiating power, paying a median US$20,974, or 8.9%, less than the last asking price, Seattle-based Zillow.com said. – Bloomberg LP

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