Spears, 25, put the seven-bedroom, 1.53-acre estate on the market on Jan. 18 for $13.5 million. On March 28, the price dropped to $11.9 million, and it is still available at that price, real estate sources confirm to PEOPLE.
Spears bought the 9,000-sq.-ft home in October 2004, shortly after marrying Kevin Federline. The property, for which the singer reportedly paid $6.9 million, also includes a garden, pool with spa, tennis court and gym.
But the house, which is in the exclusive gated Serra Retreat area where such stars as Mel Gibson live, may have priced itself out of the market for the moment, according to Kurt Rappaport, president of Westside Real Estate Agency, who does not represent the property.
"The pricing was aggressive," Rappaport tells PEOPLE. "It's an expensive piece of property and sophisticated buyers are looking for the best price."
In fact, says Rappaport, Spears's celebrity could hurt her ability to sell the property. "Wealthy people don't want tour buses stopping at their front door," Rappaport said.
The markdown was first reported by TMZ.com.
A rep for Spears had no comment.