Falling Prices Leave Home Buyers, Sellers In Limbo
STEVE INSKEEP, host:
As home prices go down, more potential buyers are venturing out. The government reported yesterday that new home sales rose nearly five percent in February, which is the first uptick since last summer. Still, buyers are not always finding the bargains they'd hoped for. Elsa Partan reports on buyers in Boston coming away disappointed.
ELSA PARTAN: Take Cynthia Chang and Andy Porter. They're a stylish couple in their 30s with good jobs in the city. They got married last August and in September they set out to buy a house or a condo.
Mr. ANDY PORTER: Seemed like with the market the way it was, prices maybe would come down and interest rates seemed to have followed, so we thought it would be a good time to get back into the market. Hasn't quite turned out that way.
PARTAN: They thought they'd be swamped with options. They expected to see a half dozen houses each week in their price range of $400,000 to $600,000. That's above the median price for Boston. But some weeks there's only been one property they even wanted to check out.
Ms. CYNTHIA CHANG: Not being able to get out there and see lots of stuff has been a little bit frustrating.
PARTAN: The couple's real estate agent, B.J. Ray, has combed the listings. He says there haven't been a lot of gems lately.
Mr. B.J. RAY (Real Estate Agent): There's plenty of foreclosures and short sell properties and things that maybe didn't get swept up over the past couple years, but in terms of good quality listings, you just don't find them because the people that own them aren't selling them right now unless they have to.
PARTAN: Most of the foreclosures in Boston have been in lower income neighborhoods. This couple would consider buying a foreclosure, but they haven't seen many in the places where they want to live.
Today they're looking at a 12-year-old condo in one of their favorite neighborhoods, Somerville, close to Cambridge. It was on the market last year at just under a half a million dollars. Now it's back at a reduced price, but Chang is not impressed. She points to trim that's lifting away from the wall.
Ms. CHANG: Knowing that this is a relatively new place, we already start to notice some places where, you know, some details are starting to fall apart.
PARTAN: Did we get to the price? I don't remember the price.
Mr. PORTER: Four-forty-nine.
Ms. CHANG: Yeah, definitely not worth what they're asking for.
PARTAN: She'd like to see another $75,000 knocked off the price. Karl Case of the Case-Shiller Home Price Index says buyers can be forgiven for wondering why these houses aren't cheaper.
Mr. KARL CASE (Case-Shiller Home Price Index): If you're looking in a good area, there's no free lunch. People will not sell out. If you want bargains, look in the low income areas.
PARTAN: Across the country, 45 percent of the houses that sold last month were distressed properties. So it looks like there should be cheap deals everywhere. But Case says in a lot of areas it's just not happening.
Mr. CASE: It's not free-fall in Seattle. It's not free-fall in Chicago.
PARTAN: Nor in Atlanta, Portland, Denver, Boston, and other places. There prices are sticky. They don't come down much because sellers are optimistic that they'll go up again, like they have in the past.
Mr. CASE: There are areas in every one of those cities where there are auction sales and prices are falling sharply. But by and large the sticky market is dominating most of the other areas of the country.
PARTAN: For home owners who live in these areas and aren't in trouble with their mortgages, this is good. It means they can hold onto more home equity. But for home buyers, it's disappointing. Case does not expect things to change anytime soon. That means buyers may never find those bargains they were looking for.
For NPR News, I'm Elsa Partan.
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