Its only going to get worse in the fall. 

Many sellers are holding back now thinking that there will be this flurry of buyers in September, however guess what: they're all thinking the same thing, and many will go to market at the same time. There will be a surge in listings as a result, and the potential buyers at that time will then be subject to the mortgage reform that's coming, and will not have as much buying power as they did in the years previous.

Increase in supply + substantially restricted access to $$ (comparatively speaking to demand's current ability to obtain financing)  = Downward pressure on pricing.

Add to this that both the foreign and speculative demand / buyers are now all but gone, and, well, you get the rest (I hope).