The national housing slump showed no signs of easing in December. The monthly U.S. Commerce Department report shows new home sales fell nearly five percent in December to their lowest level in almost 13 years. And with foreclosures now at a 20-year high in some states, realtors in some of the hardest hit states are trying out a creative new idea to entice buyers. VOA's Mil Arcega reports.
Mounting economic uncertainty has led to a sharp decline in property sales across the country.
But with the Federal Reserve's rate cuts driving down mortgage rates -- and with median home prices nearly 15 percent lower than they were last year, U.S. homes are more affordable now than they have been for years.
In California, realtors are doing what they can to keep the housing market alive. Dick Keenan at Keller Williams Realty is riding the latest trend in real estate marketing.
Welcome to the foreclosure bus tour. For $20, potential buyers will tour and bid on as many as 10 homes in just under four hours -- all of them at fire sale [very low] prices.
It is an opportunity Mike and Mary Hays did not want to miss. "We're recently married and are looking for our first -- well, our dream home," Mike said.
With nationwide default rates skyrocketing, bus tours like this one are becoming popular across the country. Realtors say in some cases, homes initially valued at $650,000 have sold for under $450,000.
Potential buyers Sandy and Jim Fisher say there is only one problem. "No one knows what they're going to be asking in two to three months. That's where the problem comes in," said Jim.
The market's uncertainty has created hardship for Mike and Dawn Lembeck. Their four-bedroom, three-bath home has been on the market for nearly a year.
Home seller Dawn Lembeck says she is optimitic about selling her home. "Well, we expected to have this house sold before we moved. We refinanced this home to move into our new home."
The Lembecks are prepared to hold on for a year. But housing analyst Karen Weaver predicts tough times ahead for people trying to sell their homes in expensive markets like California. "It's going to be three years before we even have flat home prices, or stability in home prices. We just have this tsunami of defaults facing us and that's driving down prices -- it's inescapable."
Analysts warn that home prices in some areas could fall another 30 percent before the country sees a turnaround in the U.S. housing market.