During ‘normal’ real estate times, when property appreciated at a rate slightly better than inflation, but not that the rapid rates we saw over the last few years, the general rule of thumb was that it took two years after buying a house to sell it and break even, given the costs of acquiring the house (mortgage app, title, legal fees) and selling it (commissions, legal fees, etc.) If someone bought a house and needed to sell it in less than two years, it was generally acknowledged that the seller would likely take some loss. During the run up of the past four or five years, that rule of thumb was thrown out the window. Sellers expected to make a profit if they only held a property for even less than a year.
That psychology is causing some problems right now. There are some houses on the market right now that were bought by the current owners within the past year. In most cases, these aren’t investors looking to flip a house, but rather owners who’s situations have changed — moving, transfer, divorce or just simply not using the house. They’ve put them on the market, but at a price substantially higher than they paid (breakeven, with the expenses coming in and going out, is about 10% above their purchase price.) Sales prices are a matter of public record, and buyers are questioning why a house is worth more than it was 6, 9 or even 12 months ago, given the downward trend in the market. Its a good question, and one that appraisers ask as well. Appraisers are required to report on recent sales of the property being appraised as pt of he appraisal process
These "recently bought, now back on the market" properties are difficult to make a deal on, because sellers still harbor the idea that they’ll never take a loss, but buyers are understandably hesitant to pay more for a house than it sold for six months ago. Its just another clog in making deals and getting the market moving.