If you really think about it, the listing price of a house means ABSOLUTELY NOTHING --- regardless of what kind of a market we're in.  Below are a few common conversations that explore this issue. 


BUYER:  Well....this house is priced at $185,000 and we can't spend any more than $160,000 so we might as well not even go look at it. 

BUT WAIT: If the house is only worth $165,000 (and just happens to be priced at $185,000), then it would certainly be worthwhile looking at -- because when an offer comes in the owner might be reasonable about the actual value of the house.  You need to know more than the asking price of the house --- you need to know what it's actually worth.


BUYER:  I really like this house, it's listed at $295,000 so perhaps we could offer $285,000?

BUT WAIT:  Don't base an offering price on the asking price!  What if the house mentioned above was listed at $495,000 (and it was the same house) --- would you then offer around $480,000?  The asking price is not necessarily an indication of market value, so take your cues from market values, not asking prices.


BUYER:  The house is listed at $225,000 and that seems like a good deal, but in this market, I'm not willing to pay any more than $215,000 for it.

BUT WAIT:  Really?  What if the three most comparable properties in the city/county just sold for $250,000 --- and thus we are reasonable assured that the value is $250,000 (+/-) --- you'd really still only pay $215,000?


SELLER:  Let's list my house at $450,000 --- that's right about the price that all of my neighbors are asking for their houses.

BUT WAIT:  Regardless of whether the neighbors' houses are listed for $450,000 or $850,00, if they are selling for $350,000 then those sold houses should be the guide, not what  is on the market now.


These are just a few illustrations of the fact that the asking price of a house may mean absolutely nothing.  Certainly there are times when the asking price is just at / above / below the market value (the price at which similar homes have recently sold) --- but that is not always the case.

Beyond the asking price, you need to get comfortable with what the actual market value is of the houses you are considering.