Well Michael, I'm located in the Bay Area but I think the tightening of credit and lending standards has had an impact on real estate in general. The reason being that because credit and lending standards have gotten stricter, the pool of qualified buyers has shrunk. With less buyers available and as many properties are being listed now, there is now a surplus of inventory on the market. The principle of supply and demand will make the real estate market react in just the way you described--the sales prices will begin to fall in order to attract the remaining qualified buyers.
This is the predicament that many sellers are in right now. They have to continuously slash prices in many places to compete with other homes that are selling and in order to have a chance to be sold on the market. It is now a buyer's market and sales prices are falling. Hope this helped, and if in the case you are selling your home, I wish you the best of luck! Find a competent and trustworthy Realtor, that is your best bet in this tough market.... more