Luxury homes with slashed prices

Greenwich, Conn., is known for sprawling abodes like the 10,670 square-foot manse at 43 Sterling Road. It boasts six bedrooms atop 6.5 acres of rolling greenery, complete with a pool, spa, tennis court, basketball court and shooting range.

"The ideal family compound is at hand," crows the home's listing. In fact, it's closer at hand than one might expect; the property's asking price has been lowered from an initial US$6,350,000 on July 1 to $4,950,000 as of Oct. 22, a reduction of 22%.

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This home is one of many whose price has been brought down substantially by the recession and real estate bust. Even in posh Greenwich, a third of all homes on the market have seen some form of price cut—13%, on average—in October, for a total of US$113 million in reductions throughout the well-heeled hamlet.

Across the United States, asking prices for luxury homes (those valued at US$2 million and higher) are currently down an average of 14% from their initial listing prices, much higher than the national average of 10%. Luxury homes represent less than 2% of all current listings on Trulia.com, but are responsible for 25% of the US$28.4 billion in home price reductions.

"While inventory levels are starting to come down, they are still on the rise in the luxury market," says Ken Shuman, spokesman for Trulia.com. "Luxury homes—ones listed at $2 million and above—continue to bear the brunt of discounts being offered."

Behind the Numbers

To form our list of bargain-bin luxury homes, we looked at Trulia's most recent price reduction data on homes with starting prices above $2 million. We singled out 10 across the U.S. selling with reduced rates of 20% or more.

To be sure, the Greenwich estate wasn't the only bargain. Across the country in sunny Newport Beach, Calif., one can find a West Coast dream home—5,400 square feet, five bedrooms, five bathrooms, and a private dock—at a million-dollar discount. Originally listed at $4,595,000 in July, this property is now available for $3,595,000, a 21.7% reduction.

For those with Midwestern proclivities, even steeper bargains are available in Chicago. One example: a chic five-bedroom, five-bathroom home with double-height ceilings, three decks and a three-car garage in tony Lincoln Park. At US$2,499,990, the abode has been reduced 24.7% from its original $3,324,000 asking price, making it a much better bargain than the average home in Chicago, where asking prices are down 8.7% on average.

The biggest price reduction out of all the homes on our list belongs to one of the most sumptuous: a modern 4,440 square-foot home in Seattle, Wash. Perched on a hill overlooking the city and Puget Sound, it comes complete with a home theater, wet bar and even a three-story elevator. The cliff-side manse is on the market for US$2,495,000—a whopping 32.4% drop from its initial $3,695,000 listing price.

Are more price cuts in the luxury sector to come? Most likely. Rising inventories in Tiffany neighborhoods are expected to result in homeowners lowering prices to attract buyers.

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In Pictures: Luxury Homes With Slashed Prices