In my opinion, the difference in price will reflect a combination of 1) house-to-house differences (lot size, condition, location within the area) and 2) seller motivation.
As an agent that lives in and loves Pasadena, I'd encourage you to look at things a bit differently. If you find a home that you really want to live in, then have your agent (and of course I'd be happy to represent you, professionally and with your best interests in mind) find out the motivation level of the seller. Based upon that, offer the price that you are able and comfortable paying; in other words, 20% may work if the seller is motivated, or it may not - but if you love the home, focus more on the achievable price (what the seller may agree to) and whether you think it is worth paying (again, your agent can help here, factoring in the details of the home.) Some sellers are not realistic and it is not worth wasting your time with them. Others are, and you may be able to negotiate 20% from their current listing price, especially if they have not reduced their price and are considering it.
Also, if the home is gorgeous, remember that you are looking at a very desirable area and that while the price may be less than a year ago, it may still not be much less - which is a good thing after you become the owner, and no doubt part of the reason you decided to look in the area to begin with.
I hope this is helpful, and again, I'd be happy to meet for a more detailed consultation, including discussing specific listings with you.
Sotheby's International Realty