Excellent analogy - current market conditions

I went to an open house for a property that will be auctioned next weekend. As was talking to the agent we started talking about the current market conditions over here. He told me his broker gave them a great analogy of the current market conditions.

He posted a $20 bill on the board and told everybody 'who's going to pay me $50 for this bill?'. Of course, nobody went for it. Then he said 'OK, who is going to give me $40?'. Again, nobody. He then lowered to $35 with the same results. One of the agents told him 'I offer you $14' and then other then offered $17, at which point the broker took the deal.

Obviously this represents the current market over here. I think the message the broker was trying to pass to the agents was that, no matter what the sellers want for the property, the market will offer what it thinks is the right price. The real value right now will not represent the wishes of the sellers, that is just the current state of RE over here.

I thought of posting this here and see if any of you, especially the realtors, have opinions about this example.


PS: The great thing is that this brokerage firm is one used by some banks in this area to get rid of their REOs. Good contact made here.