Homes for sale, but not for a song

Real-estate reports all point to a slowdown after a long boom, but don't assume that it's suddenly a buyers market out there.

It's true that sellers no longer can expect multiple offers on the first day they list their home. For shoppers, it's a strange and wonderful feeling to have some leverage.

Yet in most metro areas, the current cool-off doesn't mean a surplus of bargain deals.

Mortgage rates are up, so the cost of owning a home is actually higher for many people than it was a year ago. And median prices are still rising, not falling. Markdowns are now common in some once-hot markets, but from the Carolinas to Colorado, many metro areas remain strong.

"It's much more a stabilized, normal market," says Michael Maloney, managing broker at Keller Williams Realty in Richmond, Va. Prices continue to rise, he says, but unlike a year ago, "we're not seeing the frantic multiple offers and bidding wars."

He expects the market to remain robust, with sales bolstered in part by businesses relocating from the congested communities near the nation's capital.

In some other areas, a true buyer's market may be on its way. But experts have a warning for today's home shoppers: It often takes a year or two for prices to adjust downward in a slowdown. So far, many areas appear to be in a "topping out" phase more than a "bottoming out."

The pattern is evident in new data released this week by the National Association of Realtors. Despite a rise in both interest rates and the inventory of homes, the median sales price of previously owned homes was up 3.7 percent in the second quarter from the same period a year ago.

Among the nation's 151 metro areas, 26 saw the median price fall, while 37 enjoyed double-digit increases. Meanwhile, the overall volume of sales was 7 percent lower than last year.

Separate reports confirmed that home builders face a harsher climate of cyclical downturn. New housing starts dropped more than expected in July, and have fallen 13.3 percent in the past year, according to data released Wednesday. And an index of builder confidence fell this week to a 15-year low – suggesting more retrenchment to come.

So far, the market shift is visible more in the behavior of buyers and sellers than in the prices. Some builders are throwing in free granite countertops, while ordinary sellers are making sure their homes don't need obvious repairs.

"In the past, buyers were taking properties just as they were ... because they were afraid of prices going up," says Linda Behnke, assistant manager at a RE/MAX office near San Diego. "They were just happy to just get the house."

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