According to the recent data published on Trulia.com, Philadelphia, as well as the entire nation is suffering from the Post Tax Credit Hangover. It is true! Those folks that priced their home at or above the market threshold during the 2nd quarter of this year have finally slashed their home prices quite dramatically as evidenced in the July statistics.

According to the report, in Philadelphia, 29% of all sellers made the decision to reduce the price of their home to help increase the possibility of a sale. On average sellers reduced their price by 8% in Philadelphia. For a $100,000 home that is an $8,000 reduction. For a $500,000 home that is $40,000. That is as much as a new Lexus! In essence, Philadelphia slashed their home prices to the tune of $66,643,452 in July 2010!

The Cure to the Tax Credit Hangover is simple but like all medicine, it is not so palatable. The cure is the the good old fashioned recipe called “Hair of the Dog that Bit You”. In other words... Do More of the Same! Let me spell it out for you. Continued price adjustments are “the cure” for the homes that still remain unsold. Understandably, that approach may not work for many of the home owners out there who owe more money than their property is worth, but for buyers it is a real opportunity. Interest rates are at an all time low, historically low in fact. The latest numbers were in the 4% range. This Real Estate climate offers the perfect scenario for a buyer to establish real wealth. Wealth in the form of real estate equity that will pay off in time. Very much like the way our parents and grandparents grew their wealth, through real estate over time. Looks like we have to go back to the basics, folks! And there is nothing wrong with that.

It is not all bad. As they say, everything is relative and these numbers can be spun in a million different ways. For example, in Minneapolis, MN, 40% of their inventory was reduced this July. In Detroit, MI, the average price reduction for a home was a walloping 26%! That means a home being sold for $100,000 was reduced to $74,000. A $500,000 home would have done a $130,000 reduction. That is quite literally a college education (but that is another subject). The Western portion of the United States seems to be leading with those high numbers. Comparatively, the Philadelphia Real Estate Market is doing quite well.

[Reference: http://info.trulia.com/index.php?s=43&item=94]