I would look at it from a finance point of view. First I would get a realtor to run some recent comps for that particular building and some within a couple of blocks for the last 2 months. That way you know what's the typical price per sq ft. in the area and for each type of characteristic (view, floor, etc.). Once you armed with that knowledge you know a fair price and then I would go lower since it has been on the market so long. Also, right now cash is king. I would try to negotiate an immediate credit for non recurring closing costs from the seller. I would use this cash to make some more investments; so that you are getting a great deal and are diversifying.
If this a new construction development, you can ask for a lot of things like asking the Seller to pay for upgrades, non-recurring closing costs, a year or two of dues and offer less in your original offer.
If this is a resale and the property has been for sale for a year, you should ask your agent to show you a list of comparable sales and make your offer based on that. It was probably seriously over-priced to begin with and your agent should have given you a history of the pricing of that unit, a history of sales in the complex as well as a CMA on the area to help you make your first offering price....Your agent can present that to the Seller's agent and begin negotiations from there.
Without knowing which building and all other details, it is hard to give you a percentage.
Having sold $35+ million worth of condos in South Beach last year, I can honestly say , sometimes the answer will suprise you!
You need to have information in front of you in order for you to answer your own question. As a realtor in the South Beach area, I provide such information to help my clients make informed decisions.
Along with the advice to work with your agent to determine an offer price I'd add what I tell all my cleints, now and when buyers were competing for homes. "Offer what you are comfoprtable paying for the property. You need to b e comfortable with the price if you get the property and you need to be comfortable with the offer if it gets rejected knowing that you gave it the shot that you wanted".
I always tell that to my clients after going over comps, my market review and any research I can do on the seller and the listing agent.
Remember it is your decision and it is "a ready and willing buyer" that sets market value.
Be prepared to have a little give and take with the seller, they might have a different idea of the value. But if a property has been on the market for a year they might not really be a seller.
One of the misconceptions I think you've identified is that the "nation wide" market has gone down 10%. That is an average that the members of the press publish. Averages don't tell a very good story, and you should not rely on them for making property purchase decisions. Specific markets, like SF, Manhattan, Chicago, Santa Barbara etc, are actually doing well. Even in these city-markets, there are some neighborhoods that are increasing by large percentages, and there are neighborhoods that are decreasing in percentages.
When you select an agent to help you, have them assist you in studying that property, it's owner, and the neighborhood around it to better make your purchase decision.
That is a perfect question to ask your Realtor, who hopefully has experience in negotiating good deals for their clients! This is but one reason why Realtors are worth their money.