What's still not talked about is these lower prices are likely to further increase existing foreclosures, due to more owners walking away from underwater properties.
It seems to me we have two distinct markets and one average.
Many families are going to avoid the bank owned properties and short sales because of the risks and the complications (getting these banks to the closing table and getting good title is very hard).
Other families who take the risks and persevere will often be rewarded for their risks.
I agree the appraisals for the “good homes” are going to be hard to get but that doesn’t mean the value of those homes are down, it means the comparatives are not truly comparative.
The one getting hurt will be the one who needs to unload the home when many buyers have lower cost options. Their hold time will be greatly increased.