The silver lining of the housing mess

By: HousingWire staff
April 24, 2008

Housing sucks. We get it. But the ongoing correction in the U.S. housing market is doing the one thing that market pundits have suggested for years was needed: making homes more affordable.

Via the WSJ’s James Hagerty on Thursday:

And now for the heartwarming side of the housing bust: It’s helping some people buy homes that they couldn’t afford a couple of years ago.

Michelle Dudley for years commuted 50 miles each way to her job as a civil servant in Anaheim, Calif., because she and her husband, Don, didn’t feel they could afford a home near her office. This week, though, the Dudleys moved into a three-bedroom house in Anaheim that they recently bought for $390,000, down from the original listing price of $445,000 in November. Similar homes in the area were selling for as much as about $600,000 two years ago, says Erin Eckert, an agent for Redfin, an online real-estate brokerage that represented the Dudleys.

We cover more than our fair share of primary and secondary market trends here at HW, but we think its high time to recognize that there are, in fact, people still buying homes. The trending is regional, as with anything in real estate, but the evidence of increasing affordability is finally beginning to show up in some of the markets that were insanely overheated during the housing boom.

More from the WSJ:

Prices are coming down fast. Real-estate data company Zillow.com estimates that the median value for all homes in the 12 months ended March 31 fell 25% in the Las Vegas metro area, 19% in Miami and Orlando, and 16% in Phoenix. The typical value is still rising modestly in a few places, including the metro areas of Raleigh and Charlotte, N.C., Dallas and Houston. One hitch for house hunters, though, is that mortgage lenders have become much more restrictive with loans. And even buyers who can get financing still face a tricky question: Should I wait for a lower price? Buying now, with home prices generally falling, is “a gamble,” says Ms. Dudley, who just moved into her new Anaheim home. But, she says, home prices will rise again at some point. Meanwhile, she was tired of her long, expensive commute.