Just Looking, on the one hand, yes, some houses in some areas are not maintaining the value they had 5 years ago. However, if you actually wanted to live in a house in a desirable neighborhood here in Kansas City, I think you will find that the average days on market for most of those homes is around 60 in the 200,000-300,000$ price range. Homes that are in show condition and priced right often sell in less than 30 days. The multi-million dollar homes are still in oversupply so generally take much much longer to move. And the neighborhoods that are 50% investors are not doing well in maintaining their value. Since most people buying homes right now want to live in the home and many intend to raise children, they want the more desirable schools and amenities offered in the most popular neighborhoods. In Leawood, for instance, average home values increased 43% from the year 2003-2007. In Prairie Village, they increased 15% during that time. Mission Hills, 25%. Kansas City, MO zip code 64113, 23%. 64120 went down 20% but very few buyers are looking at that part of Kansas City as a place they want to live. Brookside and Waldo went up 7.5-11%.
Overall in Kansas City, the inventory is decreasing. December of 2007, there were around 23,000 homes for sale; in June, we averaged 18-19,000. As the inventory continues to decrease and interest rates rise, home values, especially in the most popular areas, will level off and eventually start to rise. As this happens, buyers who can no longer qualify for mortgages in that price range will be forced to look at the surrounding areas which will cause those home prices to stabilize.
Kansas City has never seen the fluctuations that both coasts experience. Investors don't do as well here because of that. (they can't "make a killing" in our market; only a modest profit) But people who want to own their own home can still do so in our market. We are one of the places in the United States where a regular working person can afford to own their own home.
So, I guess it depends on where you are "just looking" and what kind of condition and neighborhood you choose to live in.