Michael - "Frozen Market" is a good way to describe what we are all seeing in some places. Yes, good point too many reductions condition a buyer for more, but what's a seller to do? Reduction aversion or pull it off the market. Thanks for the comment.

Cindy - There are many sellers and sellers agents, including myself, that are asking some of the very same questions and have experienced the same downward spiral, but as you pointed out if your home isn't for sale there's a zero chance it'll sell.

What's next if price reductions don't work and the seller has to sell and the price has been reduced to "razor thin margins"? Do you hold your price and risk "cost overrun"? You've made another good point about increasing "inventory of buyers".

Do we shift our business plans from attracting sellers to attracting buyers? Since buyers can find a lot on their own on the internet, I think the key to attracting buyers to your area is becoming the "portal of information". Maybe buyers are out there, but we just haven't found the "right" way to connect with them. Thanks for the comment.

Waiting - Thank you for the comment. No one said buyers were ignorant. If it makes sense for you to wait, then wait. I understand your position of capitulation, but if warranted, the reduction in price must be dramatic enough for any buyer to take notice.

Local markets are effected differently as the lending institutions work through their issues. However, in my market the subprime buyer is not gone, the guidelines have changed. It costs more to get a loan and more money is required. ALT-A buyer is constrained, I agree, but again guidelines have changed, it costs more to get a loan and more money is required. Lenn Harley has an excellent blog on how the coming changes will effect borrowers.

We don't have a lot of financial sector jobs in my area, so it's not an issue here. Unemployment is low and some prices have flattened, but it depends on the product and location. Katie Wethman had an interesting blog about pricing correctly. She also mentioned micro-markets. Pricing trends are local and so much so, that one neighborhood may be less expensive than another.

Here's another blog on pricing written by Renee Burrows. She wrote it for the Las Vegas market. but the concept can be applied to other markets. Look at the different competing factors effecting pricing.

What goes up, must come down and Real Estate is no more shielded from cyclical dynamics than any other market. I read an blog written by my friend Mike from Savannah. He said it best when he said "I have to wade through all this talk to get to the objective reality. That's my job. I can’t be tossed about by hyperbole, one way or the other."

That particular blog is about Doomer or Cheerleader and who is right. He went on to say, "Well, as in most cases of controversy, there is right and wrong on both sides. In some parts of the country, now is not the smartest time to buy, because prices continue to fall. In other parts of the country prices have stabilized and now seems to be a good time to take advantage of a lull in rising prices."

Price is on every buyer and sellers mind, always has been, always will be. I advise clients with local data. That data probably doesn't support what's happening in your part of the country and vice versa. I will continue to follow my market trends, read blogs of other professionals around the Country, look at the data objectively and advise accordingly.

Candice - Good point, not all sellers need to cave-in, only the ones that didn't buy smart. You also made a good point when you said the property could be rented for either positive cash-flow or depreciation, hold and sell. It depends on the market.

Maybe Michael will chime in with an appraisers opinion.