Unless someone has an eye on a particular house and watches it closely, I bet a lot of buyers see homes they think are too expensive and put them out of mind. Why go back to any house that's less than spectacular (in quality or deal-wise) in this market?

Me personally, I don't have time to pay attention to price cuts nor do I want to deal with the sellers who think their home is worth more than the market will bear. I look for a correct pricing right off the bat.

My normal home browsing habits include looking at recently sold homes across the Baltimore Metro area (excluding pending). This gives me a pretty good idea of current market value.

I've noticed something interesting, homes that are priced correctly right off the bat, usually sell within a few weeks of listing. Home listings which merely chip away at the sale price end in a distressed sale situation.

I was watching one of those home staging shows on HGTV the other day. After the staging and a big price drop, the couple said the amount of traffic visiting their house was DOWN. The home was in Mount Washington in Baltimore so I found that interesting.

I agree with Bubblemore...in my neighborhood it seems like everyone starts out at the same price (upper 300s) and is on the market seemingly forever. They go through many many price reductions and sometimes go "offmarket" and reappear later. There was one house that listed at $339k. It sold within a month for that asking price. Of course I want to get top dollar for my house but I know I have to be realistic. I would rather be on the market less time than live in a fish bowl for a year...unfortunately the $330k's are what our houses are worth now...I should have gotten out 4 years ago when they were going for $380k :-)

I think the price reductions continue to reflect the sellers' lack of acceptance of current market conditions. If you can't face up to them then you shouldn't be selling in this market. I think Baltimore actual home sales prices (bar distress sales) are pretty darn fair at the moment. If, as some predict, they go down another 10% or so, I don't think they'll stay there in the longer term.

The second chances are very slim. The reality is that nowadays the buyers are using web sites to browse homes. The web site allows to filter the list by the price range and, if, say, my budget is 250K, I might also look at homes up to 275K, but won't look at the ones priced higher. So when a house is priced at 276K while it should've been more reasonably priced at 250K, it doesn't even get on the buyers radar. And the buyers that are looking in 275-300K range won't be interested because the house is just not good enough for them and they can afford better.

Then finally when the seller drops the price to, say, 274K (yes, it's always some laughable price drop), then the buyers might not notice it because it's already been on the market for 30+ days (or more like 90+ usually) and they're only looking for the new listings. And the ones who will notice might think there must be something wrong with the house because no one seems to want it.

When a home is priced right, it instantly gets noticed by the buyers who have been in the market for some time already. And I think this is the most desirable group for the sellers because such buyers already know what else is there and have also adjusted their expectations and are ready to close the deal.

Well said Jelena