Nov. 11 (Bloomberg) -- U.S. home sellers with properties on the market as of Nov. 1 had slashed asking prices by $28.1 billion as they sought to attract buyers, Trulia Inc. said.

The average discount was 10 percent, little changed from a month earlier, the San Francisco-based real estate data provider said today. Almost 26 percent of homes for sale were reduced at least once. Luxury properties -- those costing $2 million or more -- accounted for 25 percent of the dollar value of reductions and less than 2 percent of listings, Trulia said.

Sales of existing U.S. homes increased 11 percent to a two- year high in the third quarter as an $8,000 tax credit for first-time buyers lifted demand, the National Association of Realtors said yesterday. The median price fell 11 percent from a year earlier to $177,900.

“We have seen a definite increase in the number of home sales,” Pete Flint, chief executive officer of Trulia, said in an interview. He credited the tax credit, while adding that many homes have been priced too high.

“Sellers are realizing that they need to discount prices to sell their homes in today’s market, but it’s a tough pill to swallow,” Flint said.

The Northeast had the highest proportion of markdowns, with 29 percent of listings in the region discounted at least once, according to Trulia. More than 30 percent of homes for sale in Connecticut, Massachusetts, Rhode Island and New Hampshire were reduced, Trulia said.

Minneapolis, Milwaukee

Among the 50 largest U.S. cities, Minneapolis had the highest proportion of discounts, with prices lowered on 39 percent of homes for sale. Milwaukee and Baltimore followed at 37 percent, Trulia said. Prices were cut on 36 percent of listings in Portland, Oregon; Memphis, Tennessee; and Jacksonville, Florida.

Detroit had the biggest average reduction, at 25 percent. Prices were lowered on 19 percent of homes in the city, resulting in $10.3 million in total reductions, Trulia said.

Closely held Trulia collects data from brokers and agents, third-party providers and multiple-listing services. The survey included about 3 million properties for sale as of Nov. 1, excluding foreclosures and undeveloped land.

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

Last Updated: November 11, 2009 00:01 EST