I work with buyers and sellers so I get to see both sides which helps me advise and explain many market nuances. What I find myself telling both buyers and sellers is what can be expected in multiple offer situations, and why you can't expect a house to fetch the same price as its neighbor.
What I'm seeing over and over is this: when you're in a multiple offers situation, regardless if there are 2 offers to 20 on any given property, I've seen a group of offers bunched in a $5k-10k price range. But there are 2 or 3 (or maybe even just 1) offer which catapults beyond the bunch. Those determined buyers know their best bet to get an accepted offer is to come in clean (no contingencies), with a short escrow period, and a high price.
The reason you can't rely on a neighbor's sale price to totally dictate future sales in the area is because the driving force behind those offers which are heads and shoulders above the others is the buyers making offers that given week. I know it seems like prices keep going up, up, up, and truth be told, that's not untrue; but, look at the list below and notice that there are still many properties selling closer to asking price, even a couple selling below asking.
Don't compete against yourself to the point you push yourself out of the market. Each property should be taken on a case by case basis, with neighboring sales analyzed on a variety of matrices to provide the most reliable information available.
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