In the Ipswich area alone I know of at least 5 agents to have shut their doors permanently since September last year. If there's any indication the market's changed, surely this is it.

But it's not just local, this is national.  Miles Shipside, Commercial Director of Rightmove says in the May '08 House Price Index;

“Sales are still happening where sellers are pricing realistically, especially where they are getting similar reductions on the home they are buying. With the current mortgage famine forecast to last for 2 years, sellers need to focus on trying to attract the limited number of buyers who have access to funds.

Some estate agents are now turning away new instructions if they are similar to the properties they already have on their books and cannot sell. This is a major cultural change for most estate agents, but those with experience of previous downturns recognise there are big costs in burdening yourself with even more over priced stock.”

But it's not all doom and gloom. If you want to move up in the market you can use the current situation to your advantage.  Let's say your house is on the market for £200,000 and you reduce it by 10% to entice a buyer with money. 

You would reduce by £20,000 and agree a sale at £180,000. You then use this tactic on the home you want which is at £300,000. If done well you end up with £30,000 off, a difference between the two of £10,000.00 in your favour.

So, If you really do want to get moving, use the unrealistic asking prices to make yours look like the bargain of the month, attract some serious buyers and trouser thousands by doing the same with the property you want to buy.