"Meaning that there is not a whole lot of flexibility in the price, with the exception of homes priced over $1 million," he said. "This illustrates how buyers looking for a deal have their work cut out for them. Lowball Larry is not going to be successful in today's market."
And Highball Harry, let's call him, is the overly optimistic seller who ignores the advice of his agent and sees his unsold home sit, and sit and sit.
"The sales-price to original-list-price ratio illustrates how sellers are overpricing their homes and need to reduce their asking prices in order to be successful," Thomas said. "This, of course, does not account for all of the unsuccessful homeowners who remain on the market, as there are 11,300 homes on the active listing inventory [in Orange County]. It is not a specific area, or price range, or foreclosure, or short sale. Overpricing has made its way into every neighborhood, every type of property."
The problem this creates is more properties sitting unsold in an already stagnant market. "Properties priced at the wrong level sit on the market until the pricing reality sets in," he said.
Overpricing quite often occurs when sellers refuse to hear a real estate agent's suggestion on price, say those familiar with the situation, and it has been a regularly occurring theme since the market downturn began a few years ago.
"The customer or client is not always right," wrote Teresa Boardman, whose article, "The real estate customer is not always right," was published July 28 on real estate news service Inman News. "People hire us because we know how to sell real estate, and we need to know when to say no."