Buyers are searching for the best value on the market and they have a high volume of properties to compare. For a decade, sellers have ruled and now the shoe is on the other foot. You cannot blame the buyers for relishing their new found power. Don't expect them to give it up soon.
The mistakes that many sellers are making is:
1) Trying to recapture 100% of their losses. What I mean is that they often lump all their liabilities into their asking price attemping to recover enough funds to cover all their debt. If they are what we call "upside down" in their home (owe more than it is worth) they often have other debt as well. And, since homes have been the economic life preserver of sellers for over a decade, there is no other alternative than to stick to what has worked in the past. They really have no other alternative.
2) Of the owners that have lived in their homes many years and have built substantial equity, they are focusing on the recent depreciation not the long term appreciaiton they have gained.
3) If their home has been on the market for months and no acceptable offer has been received, their agent may suggest a price decrease that is relative to the drop in average home prices. The home is still overpriced unles they drop their price even futher than the drop in average salse. Sellers must drop their price once to keep pace with the market, once again to approach true market value and then a third time to make their home the best investment out there to entice an offer. All three reductions must happen simulatniously and that is a difficult realiztion.
Many sellers across the country are dropping their prices. In fact, the oddity is that even in the markets where sellers are reducing their asking oprices, the avergae sales price conitnues to climb. Why is that? How can that happen?
The answer is that flippers have droppped from the market, rental owners are waiting to purchase additional properties, condo sales are off, lack of availbale finanicng for first time home buyers, luxury home sale remaining strong. These factors all lead to an increase in the average sales price.