Today's business section has an article reporting that unit sales are down, but prices are "inching" up. This may surprise people, but it's important to remember how these statistics are compiled, and that's by adding all the sales in one time period and comparing them to all the sales combined in another time period. That's not an apples-to-apples comparison, unless by chance the same house sold in both periods, and you just looked at that sale.
With so many properties on the market, and the lagging state of the real estate industry, only the best homes are selling. By that, I mean the ones that are priced compellingly and are in close to pristine condition. There are some exceptions, especially in areas that are in demand and have less inventory, but in general only the "good" buys are selling.
What does that mean for sellers? Don't assume that your home is worth more than it was last year, and don't assume that you can price it aggressively. One of the most striking changes in the real estate field over the past 25 years is the amount of market knowledge available to, and often absorbed by, buyers. They know what your home is worth, and they aren't--except in the rarest of circumstances--going to pay more. If your house stands out, in price, location, appearance, or condition, you have a better chance of selling it. Those are the home sales showing up in the statistics. Adjust your expectations accordingly!