Multiple reasons... it's cheaper to rent right now (locally where I am). Banks now expect people to have money down, and that is keeping some people out of the market. When it was no money down, that added more people but that's over now. I know of people that are getting layed off or at risk of being layed off, which wasn't happening a year or two ago... Sellers are unwilling to drop prices, because they lack the liquidity to do so, or have a mindset that they can still get a 2005 price for their home.

If I see a home 25-30% off the 2005 peak, and it's not trashed, I'll buy it... I'm not a realtor.

Wed May 21 2008, 07:01

banks /instititions have very low funds to lend after their performing assets stopped performing

Wed May 21 2008, 01:45

Last month, the Wall Street Journal had an article titled:
"The Housing Crisis Is Over"
http://online.wsj.com/public/article_print/SB121003604494869…

Also, listen to this NPR audiocast. An excellent summary!
http://www.npr.org/templates/story/story.php?storyId=90327686

Tue May 20 2008, 22:43

Fear. Fear of recession, fear of the sky falling, fear of feeling a fool because they feel like they didn't wait until the very lowest price, fear of having to sell their existing home, fear of losing their jobs, fear about gas and food prices,...etc. And, too many choices--making decisions is hard for many and the more choices there are the harder it is to come to a conclusion. Yes, prices are good for buyers and the interest rates are low. However, these things do not overcome the fears. So, we just get to do what we can do to change those thoughts and then wait for the national fear frenzy to get over. Then we need to relax and enjoy the coming summer!

Tue May 20 2008, 22:42

My short answer to your question is attitudes like the one expressed in your question, and especially all the negative press and the negative perception in the media.

Nothing is holding back qualified buyers from buying a place to live.

Banks are back in the business of banking. The crazy world of non-banking of the past few years which featured 100% financing with no documentation, limited documentation or outright fraud and which contributed to the gold rush mentality is gone. Unfortunately so are the fraudulent crooks who made all the bad loans they knew would never work for the borrower (and who should all be prosecuted for their despicable behaviours-but that's another topic).

Nothing is holding back qualified buyers. In fact, they are out in force and are able to command a bit more respect from Agents and Sellers now that the banking industry has gotten over it's insane period.

A typical Buyer looking for a place to live in a normal market requires good credit, a down payment and due diligence. Now that the 'air' loans are gone, the speculators who helped drive up prices for quick profits have left the market.

True investors are now in the market as they should be: looking for good properties in the better locations that make financial sense. Any 'flippers' still in the market are the saavy buyers they have always been and there are opportunities out there for good investments to be made.

And home buyers who qualify the 'old-fashioned way' are buying homes every day despite rising gas prices, presidential elections, wars and such. As a few of the answers herein have mentioned, if you are a qualified buyer now is a great time to buy.

In fact if you are realistic in pricing you may even be able to buy contingent on the sale of your existing home! Shocking but true now, unlike the past few years when escalation clauses attached to 100% fraudulent loans sent the contingent buyers out the door with little or no respect.

As someone once said 'The worm turns'. Go out and buy a home people! Don't miss out on the great home selection available in most markets.

Tue May 20 2008, 22:24

They think they are STILL paying too much; plus you generally need more money down now, and people are afraid to make the wrong move and lose what little they have now.

Tue May 20 2008, 21:43

Fear and Down Payments! Luckily both can be over come.

Most people don't have 10% to put down (imagine having to put down money) and the media keeps telling everyone how horrible the markets are.

Luckily I have down payment assistance program that allows anyone to get into any property and not have to pay it back!

It helps close deals for me!

Mon May 12 2008, 08:38

That's the $1,000,000 question! A lot of it is just a mass "movement"-people only feel comfortable doing what everyone else is doing. If their neighbor or brother-in-law is waiting for "something" (?), then most likely they will too. A lot of times for no good reason.
People like myself and different realtors and such are trying to change people perception of the current buyer's climate. No doubt, it is a great time to buy. Not a great time to sell- but you can't have it both ways. Unless you owe more on your home than you could sell it for, I'd recommend you buy and strike soon- while there are so many houses for sale and the interest rates are still low. Who knows what rates will do 6 months from now. Or even 2 days from now!
Good luck,
Ken
Ken

Mon May 12 2008, 07:36

Presidental election years are always slow, gas prices are scaring everyone, and the publicity hype about the so called recession. Unless a buyer needs to move they are going to wait it out to see the the real estate drops more.

Fri May 9 2008, 12:15

This is a very good question. If I had the definitive answer I would be famous, I am sure of that. I believe though it is a combination of factors. A lot of Buyers are in a wait and see posture. With so much negative press on the Mortgage and Real Estate Sales Industry it is no wonder they are undecided. The fact is that right now there are some real good buying opportunities out there and investors and others are just now starting to pick up on them. If the Buyers wait too long they may miss a great opportunity to purchase a home for a significant savings over last year.

Fri May 9 2008, 12:11