I was curious as to what the average seller is doing, in the city.

My guess was that sellers were being stubborn, that they weren't lowering their prices. I assumed this was a big reason why buyers were pulling back.

I based this on the FACT that the number of sales has dropped 20-25%, while average and median prices have dipped just a bit (in the city, less than 3%).

In reality, sellers seem to have gotten the picture.

I did an analysis of all condos listed for sale in the South End (using data from our local Multiple Listing Service).

There are currently 239 condos on the market in the South End.

Some units came on over the past couple of days; the unit on the market the longest has been on for 539 days, but don't get the wrong idea. It is a unit in a development under construction, and it was put into MLS back when it was just a hole in the ground.

Out of the 239, 125 have been on the market under 100 days.

Out of the 239, 115 have lowered their prices.

Out of the 239, 4 have decreased their prices by more than 20% (all under 26%).

Out of the 239, 20 have decreased their prices by 10-20%.

Out of the 239, 37 have decreased their prices by 5-10%.

Out of the 239, 54 have decreased their prices by 0-5%.

Out of the 239, 11 have increased their prices (haha ... these are mostly developer units where they were able to raise their prices as units went under agreement).

The question remains: Did the sellers simply start too high, and is there a long way down to go, before buyers get back in?

It's not just lower prices that drives buyers, however. I think perception play a large part in the equation. If you read the comments section of my recent "first-time homebuyers step back into market" post, you'll see that buyers are sitting on the sidelines, not because they feel prices have gone down, but because they believe they will go down, more.

I disagree with this theory; I think prices will remain where they are now, or drop by a small amount, percentage-wise. However, I can certainly understand buyers' behavior.

Source: MLSPIN