A Seller's Market No More

housing boom

Lots of people made lots of money in the real estate boom.

But now the news is good if you're looking to buy, but for the first time in a long time, not so good if you are selling, reports CBS News correspondent Sharyn Alfonsi.

In last year's red-hot real estate market, homes like Letty Mallery's were selling for a million bucks — often in a day. But Letty's home has been on the market for five months and hasn't moved.

In fact, she has had to drop the price of her home twice.

Letty says she is watching her nest egg shrink a little bit, "and we may need to come down still more," she says.

Loudon County, Va., where Letty lives, has been the nation's fastest growing county for the last five years. But like a lot of booming areas across the country, homes sales here have stalled.

"We waited too long. We missed the crest of the bubble," she says.

There are signs of a deflating real estate bubble everywhere — literally. On one block, there are a dozen "For Sale" signs. For realtors, it's getting ugly.

"We try to do as many things as we can to sell," says realtor Mike Wagner, but he adds "there's a lot of competition on the market, that's for sure."

Here the same number of people are buying homes, but now there are twice as many people selling. Business Week's Peter Coy says it's a classic sign of a turning market.

"We've had a lot of 'buy, buy, buy' mentality. Now we're starting to see a little bit of 'sell, sell, sell' mentality," he says.

The shift is especially true on the coasts where prices shot up during the boom. Home sales in the middle part of the county, where the boom wasn't so big, are steady. But in the last three months, sales in Boston, Los Angeles, Washington, D.C., Tampa, Miami and San Diego have stalled.

"Markets are driven not just by supply and demand but by expectations, by psychology, by fear and greed," says Coy.

Letty is trying to stay calm. She's packing up and hopes it's not too late to protect her most valuable investment — her home.

  • Stephen Smith

    Stephen Smith is a senior editor for CBSNews.com