Yesterday I discussed that when the real estate market improves all homes will increase in value.  Thus, holding out to sell your current home for a higher price won't do you any good -- as you'll then also have to pay more for the house you are buying.

But let's flip that on it's head....when the market is getting worse, do all ships sink at the same rate?  I'd suggest that some sink faster than others, and that they sink deeper than others, for example:

• Houses on busy roads
• Houses with steep driveways
• Houses with disadvantaged yards (small, steep, etc)
• Houses with unconventional floor plans

In the heat of the market a few years ago, a house on a busy road might have sold for $250k compared to the same house located inside a neighborhood selling for $255k.  Now, the house within the neighborhood might sell for $240k, but the house on the busy road won't sell for $235k.  It might sell for $230k, but it's likely to be $220k or $225k.

This is primarily the result of the high inventory levels that almost always exist in times of slower market activity.  A few years ago, being located on a busy road might have only equated as a $5k price difference because buyers didn't have many houses from which to choose.  Now, however, when buyers have LOTS of houses from which to choose, most buyers will look past the house on the busy road, instead choosing a house within a neighborhood. 

More choices for buyers means that houses with significant "issue" (see bullet points above) will sit longer and longer on the market, and sell for less than you would expect them to sell for, given their other characteristics.