But the question is, of course, how rotten?
Home sales fell off dramatically in July after the expiration of the home buyer tax credit. Then they came back a few months later, and then turned for the worse again in October. Prices are much harder to gauge because there is so much emotion involved in pricing a home, not to mention so much uncertainty surrounding foreclosure sales, which can affect the price reports dramatically.
No question it is a buyer's market out there, but really only for the buyers who don't have to sell. Those who do have to sell, the move-up buyers, are stuck in this bizarre financial disconnect. It's all about math, that they apparently refuse to do. They expect a great discount on whatever house they're buying, but they are unwilling to take a loss on the home they're selling, even if it's a net gain in the end.
"The move-up buyer is putting all his ideas about wealth based on the house he owns," notes DC area real estate agent Donna Evers. They simply refuse to do the math. "In other words, in 2005, say the peak of the market, a real estate agent told me I should be able to get $700k for my house, and now it looks like it might be worth 10 percent less - $630K so I can't sell because I've lost $70K. Well if you were going to buy a house for 950K it is now worth 855K which is a $95K differential,. plus you've got a tremendous saving on your monthly payments because interest rates are much lower compared to what they were in 2005."