Amid continued falling home prices, U.S. home buyers still are negotiating discounts at the bargaining table, according to July's Zillow Real Estate Market Reports, the latest month for which figures are available.

Buyers paid 3.3 percent—or a median of about $7,039—less than the last listing price on homes for sale during that month, Zillow's data show. That discount, however, is down slightly from 3.5 percent, or $7,630, in June, and substantially down from 4.6 percent, or $10,260, in January.

Meanwhile, 22.8 percent of all homes listed for sale on Zillow had at least one listing price reduction as of Sept. 1. The median U.S. price reduction was 6.5 percent off the original listing price. Homes listed for sale on Zillow during August were listed for a median 96 days, up from 91 in July.

Florida home buyers had the most negotiating power in July, with buyers in the Vero Beach metropolitan statistical area (MSA) paying 10.2 percent, or a median $23,500, less than the last listing price. Buyers in the Sarasota MSA paid 8.2 percent less than list price. The Naples, Daytona Beach, Miami-Fort Lauderdale, Panama City, Punta Gorda, Melbourne, Ocala, Tampa, Jacksonville, Port St. Lucie, Gainesville and Lakeland MSAs also ranked, in that order, in the top 25 markets for negotiation.

There was less or no room for negotiation in some California markets that have been hit hard by foreclosures. In the El Centro MSA, buyers paid 1.8 percent, or a median of $2,150, more than the listing price. In seven California markets—Sacramento, Merced, Modesto, Riverside, Stockton, Yuba City, and Fresno—asking price and sale price were the same.

"The strong summer selling season in 2009 has led to a decreasing difference between the last listing price and final sale price, but most buyers are still getting some additional discount at selling time," says Stan Humphries, Zillow's chief economist. "We expected list-to-sale price ratios to fall as the sales volume picked up during the summer, and the California markets are showing strong declines in the discount off the last listing price, relative to levels at the start of the year. This is fueled both by increased sales and a high proportion of foreclosure resales, which are already priced relatively low."

Humphries says, "The fact that many Florida markets are still showing comparatively higher differences between the last listing price and final sale price suggests that inventory levels are still relatively high, keeping considerable downward pressure on prices and encouraging buyers to seek large discounts off the listing price. Overall, buyers are finding favorable conditions for negotiating prices, and now can be a good time to buy, provided home buyers are financially prepared with healthy down payments and intend to stay in their home for a minimum of five to seven years."

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