TEXT OF STORY
Bob Moon: It didn’t help that numbers out today from the National Association of Realtors show that the housing market is still extremely unstable. The wave of foreclosures shows no sign of slowing and homeowners across the nation are struggling to cope with rising interest rates on their adjustable rate mortgages.
There was one ray of hope that the standoff between buyers and sellers could be ending: Sales of previously owned homes rose in May.
Still, while some prices are falling, many sellers are hanging tough and Ashley Milne-Tyte reports we could be in for a long, slow slump in the housing market.
Ashley Milne-Tyte: It’s not just that some sellers are convinced their home is worth more than it is. Christopher Thornberg is principal of Beacon Economics. He says many home owners have borrowed so much against their home, they’ll take huge losses if they sell now.
Christopher Thornberg: They’re hoping beyond hope that there’s gonna be a recovery. They’re hoping beyond hope they can find that one buyer who’s willing to pay this price. Unfortunately, I think a lot of them are being unrealistic and of course, the longer they wait, the worse the situation’s gonna be.
Marjie Sharpe and her family are trying to be realistic. They moved from to North Carolina from Texas last August. Their Texas house has been on the market ever since. They cut the price by $15,000 and recently got an offer, but they’re losing money on the deal.
Marjie Sharpe: We bought the house four years ago, the day it went on the market or the next day. It’s a great house. The people are getting a good deal. I mean, we love it…
In New York, the standoff between buyers and sellers persists. Financial analyst Chris Jadro and his wife recently found an apartment in Brooklyn. Yesterday, the seller agreed to accept their offer. It was slightly less than he had paid for the place two years ago. Today, Jadro got a phone call:
Chris Jadro: What we found out this morning is now that he doesn’t want to sell the place to us at the price we agreed upon yesterday because he figures he’ll be losing too much money, especially after transaction costs are taken into account. He’d rather rent the unit and he actually had the nerve to ask us if we wanted to rent it.
They plan to keep looking.
In New York, I’m Ashley Milne-Tyte for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.