I know of 2 buyers who sold at 10% below listing in Poway, but the asking prices in their neighborhoods have not been lowered to keep up with that reduction. Inventory is just sitting, more and more sellers are reducing their list price by tiny amounts, but the big reductions are nowhere in sight, and I don’t see a domino effect either. I sold my house for 5% below list in January, and the 2 houses near me, who were my competition between Oct – Dec as we competed for showings, have not reduced their price at all, despite being on the market several months before I was. I just checked yesterday, and they are listing at the same price as October 2005, no reduction at all.

Again, what is the lag between rising inventory and falling prices? I just see inventory rising, and small reductions, such as $5K – $20K. I just wonder how long it will take for sellers as a group to accept that they must lower prices significantly to make a sale.