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U.S. Housing Market Shows 23 Percent Year-Over-Year Rise in National Price Reductions

by Chicago Agent

Trulia.com has released its December price reduction report for the U.S. housing market. Nationally, the number of listings with at least one price cut grew by 23 percent, from 22 percent in December 2009 to 27 percent in December 2010. Meanwhile, average reductions remained flat at 11 percent in a year-over-year comparison, although they have risen by 10 percent since last month.

Model House Sitting on Pile of Pennies

Image courtesy of Robert Llewellyn/Corbis

“The homebuyer tax credit successfully created an impactful short-term demand which temporarily stabilized prices, but stopped short of being a true spark for real estate recovery,” says Pete Flint, co-founder and CEO, Trulia. “As I said in the beginning of the year, job creation will be the strongest indicator that the housing market is turning around. Looking at the latest unemployment rate which rose to 9.8 percent this month, we expect prices will continue to decline between five and seven percent nationally – especially in the first of half of 2011.”

Among the 50 largest U.S. cities, 32 experienced price reduction levels at 30 percent or higher this month compared to just 14 in December 2009. Minneapolis continues to have the highest levels at 44 percent. Moreover, Phoenix, Mesa and Baltimore also exceeded 40 percent – marking the first time four cities have reached this benchmark in a single month since Trulia began tracking price reductions in June 2009. Of the cities with the highest rate of price reductions last December, only Jacksonville and Columbus showed some signs of improvement with year-over year decreases by 5 percent and 3 percent respectively.

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