A Decade of Flat Prices?
"Still, there are signs in previously hot markets that the psychology of real estate is starting to change. Homeowners who counted on selling their houses at big profits are forced to scale back their expectations, economists say. People who would previously have scrimped to buy a home as soon as possible, before prices rose further, are now taking a harder look at whether it is worth it to buy. Sometimes they are deciding to wait longer, which leaves sellers facing long delays and forces them to mark down their prices."
''We don't have the appreciation rates we had before and we're unlikely to have them again for some time,'' said Susan Wachter, an economist at the Wharton Real Estate Center at the University of Pennsylvania. ''People correctly perceive this and are adjusting their economic behavior accordingly, in part by postponing home ownership.'' Is Renting Better? One example is Carl Spiegler, a 37-year-old salesman for a legal publisher in Chicago. He thinks that renting makes more sense in an uncertain housing market. ''I'm afraid of the 'last fool' rule,'' he said. ''Home prices have skyrocketed. My concern is that I will buy and they will stop going up.''
Caught Between Two Homes
"The owners of the Melville house put it on the market more than a year ago at $270,000. It had come down to $220,000 when the Gagliardis saw it. They talked the owners down to $215,000 and had agreed to buy it, but had to pull out when they could not sell their own place. The Melville house remains on the market at a price too high for most first-time buyers, and even a stretch for many homeowners looking to trade up."
It's interesting to notice how familiar is the situation depicted in this article.
Source: New York Times