In response to a redfin forum
I always look at the sales history of the houses that I'm interested in. I feel really bad for the people that bought the house in 2006 and are now selling it at about 95% of what the paid. I am really ticked off at the people who bought in 2002 and expect me to pay 200% of what they paid 6 years ago. Obviously I don't know from the raw numbers whether they did some major work on the house (if they completely renovated it, then sure, maybe it's worth the markup), but in general it looks like people being greedy. And that's fine. But don't expect me (as a buyer) to have any sympathy for you (as a seller) if your house doesn't sell for the price you think is fair. If there are no buyers, then it's obviously not the fair market price and you should consider marking the price down to see if that attracts some attention.
I'm trying to buy my first house, I have zero equity, I don't have a ton of cash on hand, so I am thrilled that the housing market around here looks like it's about to fall down. Because Seattle doesn't have anything remotely resembling a starter home. Any homes in the price range of what I can afford as a well-paid professional all start off with "great investment potential" and "bring your hammer." I'm not looking for an investment, and I don't have time (or money) to spend on doing major renovation. I'm looking for a reasonable place to live - somewhere I can invite my friends over and not be ashamed that it's falling apart. Somewhere I can paint the walls something other than this awful purple color my landlord apparently liked. Somewhere I can invest in double-paned windows so that the heating bill will be affordable and return my investment over the next 5 winters.
There are a lot of people in a bad situation right now because they bought the line about buying a house they couldn't really afford because they could refinance it next year for more equity or however they ended up with a mortgage they can't afford. I don't really feel bad for them, though, because when they decided to make their house an investment, it drove up the price of houses so that it was harder for us to make the house a home.