Housing Slump Makes For Buyer's Market

CBS Evening News: With Prices And Mortgage Rates Declining, More People Are Shopping For, If Not Buying, Homes

(CBS)  One of the housing industry's benchmark indexes shows home prices dropped by 18 percent in October, the sharpest annual rate drop on record, reports CBS News correspondent Kelly Wallace.

Even more alarmingly, it shows the housing crisis is spreading to cities that until now were believed to be immune to double-digit declines.

The news is a sign that the housing market, even in places like Atlanta, is sinking deeper into a hole. Barry Wisebram has been trying to sell his house for more than a year. Now desperate, he's slashing his asking price next week by $175,000 to just under $575,000.

"It seemed like a good investment at the time but I didn't exactly time the market correctly," Wisebram says with a laugh.

His timing actually couldn't have been worse, Wallace reports.

Housing prices in Atlanta dropped more than 10 percent over last year - the city's first ever double-digit decline.

Home prices fell in all 20 cities of the housing index. Hardest hit were San Francisco, Phoenix and Las Vegas - where home prices are down more than 30 percent - driven by rising foreclosures.

"The big problem right now is that we've got this huge inventory of homes and that huge inventory is putting intense downward pressure on prices across the board," says Nariman Behravesh, chief economist for INS Global Insight.

On the other hand, declining prices combined with the lowest mortgage rates in 40 years make it a buyer's market, if you have the cash.

Realtor Jessica Cohen says the holidays are usually so quiet she takes a vacation. But not this year.

"It's amazing. It's the day before New Year's Eve and I have seven appointments tonight in this building right here," said Cohen.

There are more shoppers but not necessarily more sales. Some prospective buyers are reluctant because they're worried about their jobs and they believe home prices will keep coming down.

Behravesh agrees.

"They'd rather wait because maybe six months or a year from now the price of that dream home you're looking for will be even lower so that is actually keeping a lot of people from buying right now," he said.

And that is one of the reasons why experts say the housing market hasn't bottomed out yet, Wallace reports. And it probably won't - they predict - until next summer at the earliest.

[renonv5]

Housing Slump Makes For Buyer''s Market

Don''t believe it folks, it has a long way to go and the only direction is down. The prices for the last few years were super over inflated, to the point where it was inevitable that the bubble would burst because there was absolutely no way to sustain that kind of market. If you are going to buy, wait until the next big round of foreclosures comes up, it isn''t over yet and these prices will adjust a few more times, perhaps back to where they should be.

[brannigon]

Housing Slump Makes For Buyer''s Market??? Yeah? Then why aren''t the prices of houses coming down to what they''re really worth? Maybe then, people could afford them! Its still a rip off!

[hitoyou11]

GOOD, maybe now all the people that got a house they could not pay for, will have to move. Buying what you can;t pay for, EGO is what thay is, Not A DREAM. Go live in the park.

[rillifane]

House prices are falling dramatically in places where they went up beyond all reason and where people made dumb choices about buying more than they could afford. Let them now sit down to the banquet of consequences that they have prepared for themselves.

When they started paying $500,000 for very modest houses in my neighborhood on Dallas so they could tear them down and build a MacMansion I sold to some idiot and moved out to the country. Housing prices here in rural Texas did rise modestly over the last 5 or 6 years but are holding steady precisely because people here didn''t act like idiots.

Why should the frugal and sensible subsidize the feckless and self indulgent?

[r9119111]

smurfcrusher: Evidently you don''t know what it is like to be 1 in 4 who need food stamps. I suggest you leave your lovely cocoon and live with no less than 10 of these people over three months and then see if you might change your mind.

[smurfcrusher]

The Invisible Hand is picking my pocket!

[whitemale08]

Miami Herald reports that 1 in 4 Floridians are on food stamps in spite of no state income taxes, and ''right-to-work'' state (no unions).

My question for you ''free-market'' lovers who worship Adam Smith and his invisible hand...

What would 1 in 4 Floridians do without those food stamps?

[johnpatrick9]

Most Americans are living on two incomes making less than $100,000 a year together and if they have the luxury of children then their social-economic burden is even greater. The price of homes in America at $300,000 to $700,000 a pop is absurd and so what goes up has to come down just as drasticaly. I have no pity on the goldseekers and the banks and the real estate speculators for they built their dreams on the belief that the schmuks out there would somehow eat cornflakes and drink water and forgo having those expensive children to safeguard their "investment "
Lot of *** and greed and plain stupidity and arrogance....a great country or what???

[drivelphobe]

The prices have not come down enough yet. Don''t believe the hype. We have another 40-50% to go.

[hsinco-2009]

First comes the deflation then comes............

I don''t even want to say the word.

I do hope that the incoming Administration can get things turned around but it will be a tall task.

After the current (Mis)Administration and Repuglicon cronies in the WH and in Congress have shown why the Repuglicon Party don''t have a clue about how to run a Government.