Twenty-nine percent of Chicago home-sellers have slashed their listing prices at least once, and the average price cut is 9 percent, according to an industry report. The average price for a house in Chicago after the reduction is $404,881. An average of $38,000 has been chopped off the listing price.

Across the nation, one in four sellers have cut the listing at least once, totaling $27.4 billion in reductions, the study said. The average reduction is 10.6 percent.

Major metropolitan areas continue to be hit hard. Thirty-three of the 50 largest cities in the U.S. have experienced 25 percent or more of home listings reduced in price. The cities with the most price reductions are Jacksonville, Fla.; Tucson, Ariz.; Boston; Los Angeles; Columbus, Ohio; Dallas; Honolulu; Minneapolis; Austin, Texas; Washington D.C.; Baltimore, Las Vegas and Chicago.

"Summertime is the peak season for buying and selling. With some of the lowest prices in the last decade, we expect to it be a busy season," said Pete Flint, CEO of Trulia, which did the study. "Everyone wants to think they are getting the best deal available. Price reductions are helping to spark a renewed interest in the real estate market."

The national average for price reductions on current home listings is 10.6 percent, but sellers in the areas hardest hit by foreclosures are slashing prices the most.

Detroit homeowners reduce their homes by 23 percent on average. Las Vegas and Miami sellers reduce their homes by about 15 percent. Phoenix and Mesa, Ariz. are also experiencing deep price reductions.

But the above data for Chicago does not include foreclosure properties. Trulia obtains its listing information from brokers, agents, third party aggregators and MLSs. The percentage of listings with price reductions includes any non-foreclosure property on Trulia.com that has experienced at least one price reduction since it was first posted on the site. The city data is for listings within the municipal boundaries (and not suburban areas).