Housing price denial

My wife and I are looking for a house. I'm grateful for sites like zillow.com that have made this search a little easier. I've noticed a trend since the housing meltdown started. Simply put, people think their houses are worth a lot more than they actually are. See exhibit A. Local house prices in the Miami neighborhood of Pinecrest. Granted, each house is different but there is a huge discrepancy between the asking price (Red houses) and the bid (Yellow houses, the price that a house recently sold for).  I hear a lot of hoopla about how housing prices having finally bottomed out but one look at this picture tells me we are no where near the bottom. Visit zillow.com to see how this matches up with your own neighborhood.

Image via Zillow.com (Date of screen shot: 02/10/10)