Getting a seller to drop the price to market value is all about whether it is worth the price.
 
First, you have to understand that price is the main adjustment to days on market and success.  Also you must know that any deficiencies in a property are greatly magnified in a tough market.  Therefore, the deduction you might take on a busy street property may be tripled in a tough market because the higher inventory number may mean that the property may never be shown unless the property is a very good value. 
 
Second, you can never stop asking for a price reduction or a value enhancement if that is what it takes to achieve the seller’s goals.
 
Third, you must remember that you can not get a price reduction unless you get the listing.
 
Fourth, you can take an overpriced listing if the seller has a real reason to sell.
 
Fifth, you must really know why the seller is selling.
 
You can find out why the seller is selling by asking:  Why are you selling?  Why is that important?  What would happen if that did not happen?  Sorry I am asking so many questions but you are competing against bank owned, foreclosed properties and I want to make sure that the value of a sale will exceed the lower prices that your neighbors are accepting. 
 
Once you have an exact idea of core motivation, you bring it up all the time to remind the seller of the prize.
 
You can mitigate the damage of a tough market by offering the following:
1.  Better contracts to provide surety of close
2.  Better nets by cutting days on market by better marketing.
3.  Post listing inspections to get the “deal killer” problems fixed prior to the buyer being involved in the decision.
4.  Better list to sell ratios by better marketing by informing the agents known to specialize in the area or price range of the subject property. 
5.  Minimizing litigation by risk reduction checklists.
6.  Showing how the seller’s equity can be better invested for a higher return in a faster moving vehicle by a faster sale..
7.  Letting the seller know that the inventory of unsold property may be growing and continue to grow which may lead to further price erosion and elimination of equity.
8.  Having the seller understand that once a property is listed, it stops appreciating.
9.  Letting the seller know that it is hard to make more net on the sale in this market and that your net can be increased rather by a smart purchase.
10.  What is the value of piece of mind of a sale?
11.  What if property values drop another 15%.  What would that look like?  Your net may decrease by a multiple of that percentage.
12.  What is the cost of ownership of the property per day including PITI and all expenses including a maintenance factor. 
 
 
Please make sure you show them the negative press.  Emphasize that it is the neighbors that bring lower prices and that the only way to increase showings in a tough market is mainly price related. 
 
If they continue to ignore the facts, they will never get ahead of a gently declining market.