Vicky has a point there...but not all markets are equal here. We had a much slower appreciation in our area than some of the harder hit areas. We should also have a smaller overall decrease in market value.
To help protect our renters from losing their home due to owner foreclosure we have started checking tax records on a monthly basis for our rentals to make sure that the owners are using their rent money to pay their mortgage. We inform them of this when we list their home for rent and also at the signing of any lease.
While we still expect the market to slowly decline this fall and winter season we do not expect prices to "plummet" in our area. We have very good employment and growth in the area that continues to attract new people. New schools are being built right and left. This past August was actually our best month so far this year...and we still have new business carrying over into Sept.
Like Bill said, sales and rentals are both tied to the basic economic law of supply and demand. In my opinion more than half of our listings are still overpriced and need adjustments. If these homes were priced in the market a lot of them would sell to Buyers just sitting around looking for a good property at a fair price. It seems like we are making offers on 2 to 3 homes that a Buyer likes before we can find a Seller willing and/or able to sell at fair market value. The faster Sellers realize this and adjust their price the faster we will eat up this excess inventory and stabilize the market. By keeping asking prices too high Sellers unwittingly contribute to the lower overall sales prices by keeping their home on the market as excess "unsellable" inventory.
Luckily, around here, it looks like at least some Sellers are making the move to adjust prices and stay ahead of the market. They are the ones that are selling...and many are receiving multiple offers to choose from...even in this type of market. Let's hope the rest of the pack "gets it" sooner rather than later.