REPORT: Homeowners In Denial About Value Of Properties. That seems right to me. The stuff in my neighborhood that sells goes for around 15% less than it got in 2005/2006, but I still see people putting their houses on the market for $100K more than the 2005 price. Unsurprisingly, those don’t sell. In some cases, the sellers wind up paying a mortgage on an empty house for a year or more before finally cutting the price. By then, of course, the market has fallen farther, and the realistic selling price is lower than it would have been initially, meaning a double-loss: Payments on an empty house, and a further reduced selling price.

Note this: “Humphries foresees home values continuing to fall through the middle of next year for a variety of reasons, including persistent unemployment, a significant pipeline of homes in foreclosure, as well as high rates of homes with negative equity, which means many more will likely end up in foreclosure. A return to a ‘normal’ market is likely at least three away, he says.”

My advice: If you have to sell now, price to sell quickly. It will only get worse.