The more important question is not the sale price and what may happen in the short term. California real estate appreciates better than most of the country. If you are planning on living in the house for 5 to seven years or more - make the best deal you can and move into your dream home. Be prepared to live through a year of influence from existing factors.
Another thing to consider is the end of the year is approaching. Sellers that need to sell for the current tax year are going to be pressured to make a deal. If this is not your dream home, you may want to watch the market for another month or so.
We update current MLS trends and market details weekly
Tassajara Meadow is a very nice new area of Dublin. However you are right to be concerned about property values dropping. Once one seller takes a low offer the others usually do follow suit because the last sale becomes the new benchmark. Appraisers will use the latest sales in thier comp calculations so even if the new sales are above the last sales they may not appraise. The key here is how long do you plan to live in this house? If you can hold it for at least 5 years you should be fine. This is NOT a market to buy and turn homes. Tassajara Meadow is a great place to live. The area has really developed very well and will always attract buyers who want a nice family neighborhood that is affordable.
I would say go ahead and put in your offer but plan to wait out this market.
Let me know if you would like an assitance with your offer or recent comps of the area..
If I were you, I will low ball this one at $750. That will be less than $200/sqft.