The home prices in North Weymouth have held pretty flat during the past few years, while the rest of the area had been declining. It wasn't until very recently, that they started falling. Perhaps it is because a lot of North Weymouth homes in really rough shape that have sold for really low prices recently. They needed a ton of work, and a few may be considered tear downs. This is never considered in comp. prices it seems. If your house is in good shape, you are lucky. You will enjoy the summers!

Well the properties for this area have supposedly gone down approx. 20K in last quarter and this house was very recently put on market (within a week) so since there was so much interest (there was another firm offer higher than my original which was refused also) I was advised by my realtor to go in at asking to try and secure it. There was very little negotiation since we jumped 30K from my original offer. It is a good area and a good deal on the surface considering the size of the property or so I thought until I saw the high drop on charted info for area. Understandably with the economy, there are dropped prices all over so I just was just curious if this was common practice.

Buyers determine market and property values and clearly the property was priced right if you offered full asking price and there was another interested party.

Did you work directly with the listing agent? How long was the property on the market before you made your offer? Did you get any kind of validation that the other party was actually going to make an offer or were they just going to look at the property? You say the prices in the area are now $20K below what you offered - how has it changed that drastically since your accepted offer? Usually market drops take more than a couple days. Did anyone give you the market statistics for the neighborhood prior to making your offer?
The answers to these questions may help us better understand the situation :)

If a property is priced correctly it should sell at asking price, in a perfect world. When a property is well priced it should sell pretty close to asking. You would have to look at your comparable properties, look deeper into other reasons why they might have sold for less i.e. condition, size, lot, setting, features etc. then also look at what was available at the time they sold. There's always a buyers concern if they offered too much or could have offered less, that's normal. I'm finding more and more properties going for asking price or sometimes even more depending on the circumstances.

Congratulations on your new home, I hope you enjoy many years there :)