In the last month or so we've had multiple offers on a few homes under 225K, which I haven't seen that in awhile. The $8000 down payment from the government may be helping. First time home buyers are not generally buying the 500K homes. The under 300K segment increase would make sense.
I heard today that some in Congress are trying to get the mortgage guidelines relaxed a bit. I believe the banks have the money to loan but the Fed credit requirements right now are pretty restrictive. Whether thats right or wrong I'll leave to others to decide. The housing market is the engine of the American economy and it needs to get moving again for all of our sakes.
The 'Days on Market' at 144 is of concern but from what I've seen this year alone, I would say the tightening of the mortgage guidelines has a lot to do with it. Every week we see people who are otherwise well qualified be denied at the last minute by an underwriter who has once again been given new stricter federal guidelines.
I completely agree that lending practices were far to easy before the economic problems. Overcorrection and making it very, very difficult to get a mortgage is not the answer either. Sales fall apart and sellers and buyers both are rightly unhappy about it. People can't move to the new job or they do and let the house go into foreclosure. It has a very far reaching effect on people and the economy.