In the beginning of this year, sellers were surprised by multiple offers well above their asking price. Home values were going up and up, and buyers wanted to secure a property before they wanted to go up even more. So they made offers over asking price. In hindsight, it was the right thing to do. Now, with more inventory on the market, values have stabilized and are increasing at a more normal rate. But some sellers are overpricing their homes, thinking it is still March and April of 2013.
Buyers are still ready, willing and able to buy nice homes or homes that have potential, but are no longer willing to overpay for a home. They have caught on to the current market trend (or rather they are driving the current trend) of stable values, rising inventory and slightly increasing interest rates. Sellers need to catch up. I see many homes come on the market with inflated price tags only to reduce their price about 30 days later. If they do not reduce the price, they will linger on the market longer than necessary. The seller may have a great home, and buyers may want it, but buyers understand the market and know value. They may pay a slight premium for an exceptional home, but not a huge premium.
So sellers, do yourself a favor and begin pricing your home at market value, and you most likely will get more money for your home in the long run than if you were to overprice it and turn away several motivated buyers at its debut.