Oct. 8 (Bloomberg) -- U.S. home sellers cut their asking prices by a total of $28.4 billion to attract buyers as the real estate recovery stalled, Trulia Inc. said.

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

Sales of existing U.S. 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 percent 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 stabilizes 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 percent of the total value of price cuts nationally. In Nevada, Idaho, Arizona, Wyoming, Hawaii, Utah and California, sellers have dropped an average of 13 percent off the original price, according to Trulia.

Three Million Homes

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 3 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 U.S. 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 percent of homes for sale in those cities. Baltimore had the biggest discounts of that group -- an average of 11 percent.

According to a separate survey released today by real estate data service Zillow.com, U.S. buyers paid a median $6,525, or 3 percent, 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 $20,974, or 8.9 percent, less than the last asking price, Seattle-based Zillow.com said.

To contact the reporter on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net.

Last Updated: October 8, 2009 00:01 EDT