As of June 1, slightly fewer sellers cut asking prices on their homes compared to the same time last year, according to a report by real estate search site Trulia.
The report found that 22 percent of the homes listed on Trulia’s site had seen at least one price reduction, unchanged from the month before, and slightly fewer than in June 2009 when 23.6 percent of listings experienced a price cut.
The report excludes foreclosures; it covers about 3 million listings on the site. Price reductions tend to fall as sellers feel less pressure to cut prices to make their listings competitive.
"Sellers are optimistic heading into the summer season because of the strong sales figures from the spring. The spring sales were fueled by the expiration of the tax credit and my concern is that this heavy activity is providing sellers with a false state of optimism," said Pete Flint, co-founder and CEO of Trulia, in a statement.
"We are already starting to see rising inventory levels and I believe this will be the story of the summer. For the unforeseen future, buyers will continue to have the negotiating power and I expect we will see sellers get aggressive via price cuts throughout the summer."
The collective estimated dollar amount slashed from asking prices was $26.7 billion, slightly higher than the $25 billion figure for last month. The average 10 percent discount stayed the same.
Luxury homes selling for $2 million or above made up less than 2 percent of total inventory but accounted for nearly 25 percent of total dollars cut from discounted homes, the report said. The average discount for these homes was 14 percent; 21 percent experienced a price cut.
Compared to June 2009, fewer sellers in Western states slashed their prices, while more sellers in Midwestern and Southern states felt the need to lower their prices. The site compared discounts in the top 50 most populous cities in the country.
Las Vegas led the pack of Western cities to see fewer price cuts. Ten percent of listings in the foreclosure-ridden city had seen a price reduction as of June 1, compared to 30 percent in June 2009 — a 67 percent drop in price cuts. Six California cities also saw a big drop in discounts: Oakland, San Jose, Los Angeles, Sacramento, San Francisco and San Diego.
Largest decreases in price cuts:
Of those cities to see the biggest increases in price reductions, three were in Texas: Arlington, Houston, and Fort Worth. Kansas City, Mo. saw the biggest year-over-year jump in discounts, up 55 percent.
The report noted that, for the second straight month, sellers in Minneapolis discounted prices for 40 percent of all property listings — the highest percentage since Trulia started tracking price reductions in April 2009. The discount amounts there were somewhat lower than the nationwide average, however, at 8 percent, for a total of $26.4 million cut.
Seller discounts reached a record low in March when 19 percent of listings saw price reductions.
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