Honolulu sellers made fewer home price reductions in the new year.

The percentage of Honolulu listings that were reduced at the beginning of this month dropped 33 percent from the previous month, the fifth-largest decline among 50 cities tracked by real estate search engine Trulia.com. Honolulu also ranked 47th out of 50 cities for having the lowest percentage of reduced inventory, Trulia reported yesterday.

By Jan. 1, 16 percent of Honolulu's listings had experienced at least one price reduction as compared with 21 percent for the nation. Similarly, the average reduction in Honolulu was 9 percent as compared with 11 percent for the nation. Altogether, Honolulu slashed $21.6 million from real estate home prices from December to January.

National reductions totaled $21.2 billion, a 14 percent decrease. Nationwide it was the second straight month price reduction levels have decreased and the lowest level since Trulia started tracking price reductions in April.

Sean Alleyne, a Realtor with Kailua-based Noble Turner Realty International, contributed to that tally when he dropped the price of his listing at 1173 Mokuhano St. in Hawaii Kai by another $3,000. The reduction was on top of an earlier $15,000 discount that the seller had applied to her two-bedroom, 2 1/2 -bath condominium with golf course views. The property now lists for a more competitive $562,000, Alleyne said.

“;It's priced to sell,”; Alleyne said. “;The owner really wants to move this property.”;

Honolulu's home prices fell 12.2 percent to a median of $550,000 in December from the year-ago period, the most recent measure available from the Honolulu Board of Realtors (HBR); however, sales rose 36.6 percent from the same time in December 2008.

Judging from sales and inventory levels, Honolulu's market is starting to creep back up, Alleyne said.

“;I don't think we'll see that many more price reductions,”; he said.

That said, some market segments, such as Honolulu's luxury market, still are struggling. HBR recently reported that there was less than five months of remaining inventory for properties priced from $200,000 to $700,000; however, properties priced above $1 million backlogged at 10.6 months of remaining inventory.

Nationwide, luxury homes listed for $2 million and up continue to be hit the hardest by price reductions, with the average discount rising to 15 percent for the first time since April. Additionally, luxury homes represent less than 2 percent of all current listings on Trulia but are responsible for 24 percent of the $21.2 billion in home price reductions. The average discount for homes priced less than $2 million continues to hold at 10 percent.

“;Consumers have a golden window of opportunity to find a great home and take advantage of the tax credit before mortgage rates start to rise,”; said Pete Flint, Trulia co-founder and chief executive officer. “;Historically low interest rates currently available and tax credit incentives are the ultimate price reductions for homebuyers. As rates rise throughout the course of the year, buyers will need to adjust their purchase-price ceiling.”;