Big price drops spur buyers.

There's no question... these are tough times for the housing market. Although it's been a buyers' market for a while, August was particularly slow, with transaction volume down over 30% from a year ago.

Here in September, we're seeing a new phenomenon. In neighborhoods with many active listings, a few individual sellers are dropping prices dramatically... and getting their houses sold. It can be a bit rattling to a home seller when a neighbor cuts their price by 15 or 20%. It's definitely going to affect what price you will get for yours.

For these sellers, the strategy is working. Anecdotally, we're seeing a lot of cases where this type of big price drop occurs, and a buyer then steps in and writes a contract. Two weeks ago, a condominium complex in Alexandria, Virginia had 31 active listings, and nothing there had sold since early July. In September, four homeowners dropped their price more than 15% and all four went under contract.

So, if you're thinking about dropping price, don't wait. Get ahead of the price curve by implementing your price cut ahead of your neighbors.