Before commenting on how the market is doing, I suggest watching your specific market.
I chose Danbury and the period of Jun.01.07 - Jul.31.07 and compared the market to the same period one year ago.
What you can see is that you can't generalize. Market behavior depends on the type of dwelling (Single Family, Multi Family, and Condo), and also on the price range..
In the first graphic you will see that while Single Family homes between $200K and $300K showed a difference between Listing Price and Selling Price in Jun-Jul 2007 of 3.01% while the difference in 2006 was 5.29%!!! One of the reasons is that prices were over-heated last year and that they are "more adjusted" now. So sellers are listing their homes according to the current market reality.
Another result I want to comment on is that depending on the price range, the difference between Avg. Selling Price in 2006 vs. Avg. Selling Price in 2007 varied :
1.01% for Homes in the $200K - $300K price range, and 3.90% for homes between $300K and $400K.
You would be probably saying: "OK. But we know that prices are coming down".... Well.. Not all prices are coming down. If you check Selling Prices for Condominiums, you can see that Condos within the price range of $400K and $600K were actually 6.82% higher than in 2006!!!
Unfortunately what we can see is that the number of units sold have fell. However, in terms of days on the market, again, we can't generalize:
Although most sold properties are taking longer to be sold in most of the country, you can see that Condos in the price range of $300K and $400K actually stayed less days on the market in June and July 2007 than those sold in June and July, 2006 (82 days in average in 2006 vs. 70 days in 2007).
Again, each subsegment behaves differently, and how well priced the property is and how the listing agent advertises the listing will determine how fast and how close to the Listing Price it sells.
So before generalizing, make sure you study each particular market segment.
Good Luck!
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