Welcome to a rapidly cooling housing market---with buyers taking their time looking for bargains among a surge in the number of homes available for sale while sellers are maintaining unrealistically high price tags on their homes.
The boom phase has raised prices nationwide an average of more than 50% in the past five years and more than doubled home values in many cities. "The air is coming out of the balloons," says David Lereah, chief economist at the National Asssociation of Realtors.
In a survey conducted last week by Real Trends, a real estate consulting firm, the number of home purchase contracts signed last month dropped 8% from a year earlier at 48 of the nation's large real estate brokerage firms. Expect the stand-off to continue through a long winter season before sellers accept that the market has softened and reduce their asking prices.
Source: The Wall Street Journal, November 15, 2005