My wife and I moved here last fall. Prices where we lived started flattening in 2003 so we were well aware of the trend. We offered much lower than asking for the home we purchased here. The agent thought we were nuts, but I advised her to get used to it. The market here is not what I would call weak, just realistic.

For those folks who have unrealistic ideas about prices, their homes are still for sale. I see the signs still hanging on a number of homes we looked at over 9 months ago. These are homes mostly in the Mil.+ range, some of them very nice. Houses that are in marginal locations(busy street), lack certain amenities(parking), or are not in the best of condition(dated kitchens or bathrooms) are going to sit. Buyers like us are still there but we are far more selective.

All of this is not good in the end. As those marginal homes don't sell the buyers will lower prices, possibly by considerable amounts. This hurts comps. That's what happened with our purchase, we used a low comp to push our point. We won, they lost.

Oh and this is still Philly and not New York. The crime is too high, government is weak, and the high employment tax is a reckless policy. Why there wasn't a stronger push to lower it when times were relatively good is beyond me. With the economy moderating the politicians will be reluctant to act on it now.