There is a HUGE amount of resistence from sellers and lenders to do all they can to avoid taking a loss, only when they HAVE to will prices be slashed like no tommorow. This is also beginning to happen with the builders due to skyrocketing cancellation rates and severe lack of demand, they need to sell inventory to avoid holding costs and to recoup their cash.

Yes – builder sales are the only place to see accurate house prices. They are the only dispassionate and, well, I hesitate to call them this, but – smart sellers out there. Individuals are loath to recognize losses, and banks are little better, as they hate to flow loss on a foreclosure through to their P&L. But the builders know what’s going on; they know to get rid of that inventory as fast as they can, almost regardless of the price.