The Long Island Business News has this update from New York. "On May 10, a Long Beach beachside colonial went on the market for a hair under $800,000. Two months later, the asking price dropped to $749,999. Last week, agent Renee Weinberg chopped another 55 grand off the four-bedroom home."

"'A year ago, I would have gotten 749 (thousand), no problem,' said the sales associate, who got an offer for $525,000. 'I said, ‘Forget it, tell them to get real,' Weinberg said."

"But this is residential’s new reality. After five years in the passenger’s seat, buyers have taken control of the market. Inventory is skyrocketing and shoppers are taking their sweet time as sellers drop prices, and as Weinberg can attest, buyers now scoff at asking prices."

"That’s a change from the last few months, when there was a standoff between buyers and sellers. But in the last few weeks, said Pearl Kamer, chief economist of the Long Island Association., sellers started blinking. 'Now suddenly you see prices begin to drop,' Kamer added '[Sellers] recognize they’re going to have to do something to sell that house.'"

"A Babylon Village home, for example, languished at $459,000. When the sellers asked for $60,000 less, a buyer snapped it up. In nearby West Babylon, an owner sliced more than $40,000 off a two-story colonial that remains up for grabs. 'Everybody who’s selling their home, no matter where you live, is dropping their price,' said Peter Killian of Lindenhurst, who also whacked $40,000 off his price tag."

"Desperation is apparent in some ads. 'JUST REDUCED, OWNER WANTS ACTION,' screams one for-sale-by-owner Web site. 'REDUCED FOR A QUICK SALE,' shouts another."

"There’s a glut of inventory. In the Long Island and Queens area, 33,724 residences are available, a nearly 70 percent leap from a year ago, according to the MLS of Long Island. 'Now we have certainly less buyers and we have a lot more listings,' said Bob Herrick, an owner/broker in Bay Shore."

"Real estate agents said most sellers just don’t realize that. Sellers, they said, demand the prices their neighbors got a year ago, and drop the price only when they realize that’s not possible. That’s what happened to Lindenhurst’s Killian. In December, he listed his West Lake Drive ranch at $539,000, $70,000 less than he could have gotten last year. The price seemed reasonable, he said, because he spent about $200,000 to renovate the house with a new roof and siding and a $60,000 kitchen upgrade."

"On Father’s Day, however, he dropped the price to $499,000. 'This year’s market dictated the price,' Killian said. 'I think my house is worth a lot more, but the market just doesn’t.'"