In my area-- northern San Diego county.. the prices are still off the crazy highs of 2005, but, they are nipping at its heels.
Now, though, the buyers seem more educated. The market is busy, but not frenzied. So maybe that same 2400 sq ft house is selling for 535,000K ( a good median number in my area), but the house needs to have no deferred maintenance and some or all of the bells and whistles popular in my area. That would include remodeled kitchens and baths; nice yards, etc.