How the market is hurting the product

I have really noticed lately, especially when working with first time buyers, that a lot of the homes for sale are not in the best condition. In a normal market, sellers would spruce up their house before listing it for sale with some fresh paint, new carpeting and the items on the fixit list completed. Many times, sellers would comment that their home never looked better. Now we have short sale owners who do not have the money or motivation to improve their homes, and REO properties that are owned by a lender who has already lost money on the property and do not want to spend anything on them. Add to this mix the first time buyer, who doesn't have the desire or resources to buy a house that will need a lot of work to make it livable. Seems to me there are many homes that are just going to sit there, unsold.