Prices are going up and down at the same time!

Of course what I'm talking about are the price ranges.................in my area the under 300K market has been very strong, including many(yes many) multiple offer situations. This, is of course, is partly due to the the $8000 piece of American pie that the first time home buyers are all after. That market has very much solidified and we've even seen some increases in home prices in that range. Above that say $300-350 we still have activity and have also seen some stabilization. It slows greatly after $350 until you hit $500, then its like someone just turned the lights out. It seems the $500 K range here is like the kiss of death. Its ashame to see some absolutely fantastic homes, sitting in that range as there are just plain no buyers, or should I say none who dare make a move. As a result these homes are continually dropping and offer what may be some of the best deals in this market. Its easy math that 10% of $300K is $30K and 10% of $500k is $50K. Makes sense to sell and move up...........sure, but these higher priced homes have been hit more like 20%! That's a $100K!!  Where's my check book? :)