Homebuyers Remain on the Sidelines

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WASHINGTON -- The homebuying season was a bust.

March through August are typically the peak buying months. But this year, Americans bought fewer new homes in that stretch than in any other six-month period since record-keeping began a half-century ago.

And sales of previously occupied homes didn't fare much better. They nearly matched 2009's total for the peak buying months. And that was the worst since 1997.

Combined, total sales this spring and summer were the weakest on records dating to 1963. The figures underscore how badly the housing market is faring and suggest that a recovery is years away.

Because the economy is barely growing and unemployment exceeds 9 percent, many people see a home purchase as too big a risk. Some worry about losing their jobs. Others can't afford the 20 percent down payment that most lenders now require.

Not even shrunken home prices and the lowest mortgage rates in six decades are convincing would-be buyers.

"The job engine has really sputtered out, and without jobs, Americans really can't purchase homes," said Celia Chen, a housing economist at Moody's Analytics.

Plunging stock prices and renewed recession fears have led many economists to push back expectations for a housing recovery.

Where 'Normal' Might Be Decades Away

Chen expects prices to bottom at the start of 2012. And she doesn't expect sales and prices to make a healthy recovery until 2015 at the earliest. In hard-hit areas such as California and Florida, it could take decades for prices to return to normal, she said.

Pierre Ellis, an analyst at Decision Economics, said that until wages increase and hiring picks up, sales will languish.

The "bad news is the evident absence of optimism that sales will pick up to any degree," Ellis said.

Roughly 168,000 new homes were sold from March through August, the Commerce Department said Monday. That's fewer than the 180,000 for the same period last year -- and last year's sales were boosted by a temporary buyer's tax credit. Over the same period in 2009, roughly 208,000 new homes were sold.

In a healthy six-month buying season, about 400,000 new homes would sell.

Among re-sales, about 2.8 million homes sold from March through August this year. That's roughly as many as in the same periods in 2009 and 2010. In a healthy market, about 3.3 million would be sold in that six-month stretch.

Michael McGrew, who runs McGrew Real Estate in Lawrence, Kan., said many families won't buy until the economy strengthens. Even in Lawrence, which had a low unemployment rate of 6.4 percent in July and is home to the University of Kansas, people are worried, McGrew said.

What would help most would be a relocated company that's ready to hire in the Lawrence area, McGrew says. But hopes for the housing market to turn around soon are dim, he said.

"We're actually seeing more people trading down their home or trading out of our market entirely," McGrew said.

Prices Keep Dropping

Nationally, prices are still falling. Prices for previously occupied homes have sunk more than 5 percent over the past year to a median of $168,300. New-home prices have fallen even further, by 7.7 percent, to $209,100.

That suggests that builders and Realtors are slashing prices to compete with low-priced foreclosures and short sales. Short sales occur when lenders allow homes to be sold for less than what's owed on the mortgage.

Combined, foreclosures and short sales are selling at an average 20 percent discount. And they're lowering neighboring home values.

Devan MacConnell, 28, an administrator at a nonprofit in southeast Virginia, had been renting for years before buying a short sale this month -- a one-bedroom condo in Virginia Beach overlooking the ocean. She picked it up for $215,000, about $35,000 less than neighboring apartments.

"It was a steal," she said.

Also see:
New Curb Appeal? A Dead Celebrity Slept Here

Viewpoint: Why No New Houses May Be a Good Thing

Home Sellers Step In Where Banks Fear to Tread


15 PHOTOS
Luxury Homes Headed for Auction
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Homebuyers Remain on the Sidelines

Location: Calabasas, Calif.
Listing Price: $7,499,000
Beds/Baths: 7/7
Sq. Ft.: 10,000
Auction Date: Nov. 11 (opening bid is $4,499,000)

Sited in a gated community nestled in "The Estates," a posh spot in The Oaks of Calabasas, this home, once listed at $10.8 million, offers a picturesque tree-lined driveway with stunning landscaping. Special features inside its finely finished walls include a soundproof theater, climate-controlled wine cellar, elevator and expansive guest quarters. Oh, and don't forget the "subterranean storage with an auto lift" -- for your car. 

See some mouth-watering images of this Chateau


Location: New Canaan, Conn. 
Listing Price: $10.9 million
Beds/Baths: 7/6
Sq. Ft.: 9,244
Auction date: Oct. 20 (absolute auction)

Beyond its stately 16-room colonial, this compound also has a giant 14-room entertainment complex that cost $7 million to build. The veritable athletic club includes a basketball court, bowling alley, full-swing golf center, production stage and movie theater. The property also includes a guest house, pool, spa and trout pond. 

But that's not the half of it -- get the low-down on everything this jaw-dropper has to offer

Location: Aquinnah, Mass. 
Listing Price: $2.7 million
Beds/Baths: 4/4
Sq. Ft.: 3,000
Auction Date: Oct. 14 (absolute auction)

Offering astounding panoramas of the Vineyard Sound and Elizabeth Islands, this home is ideal for entertaining: it has ample space, open ceilings and an expansive deck accessible through many rooms of the house. Stone walls and meadows add further to the idyllic feel of the residence. Hop in the outdoor shower to get really close to nature. 

Get all the details of the listing, or have a look at Obama's Vineyard summer retreat, which recently dropped onto the market to the tune of $27.3 million. 

Location: Winnetka, Ill.
Listing Price: $32 million
Beds/Baths: 6/10
Sq. Ft.: 27,000 
Auction Date: Oct. 29

Did you notice the 27,000 square feet in the specs above? Well, your eyes didn't deceive you -- this chateau, on a lakefront site near Chicago, actually offers that much space. 

See more of what this mega-mansion has to offer by viewing a slideshow of it. 

Location: Spicewood, Texas
Price: $1.9 million
Beds/Baths: 7/8
Sq. Ft.: 11,925
Auction Date: Oct. 15

Once whistling at the treetops with a $10 million asking price, this home has had to climb down a few branches. Starting bid for this property will be $1.9 million. The long and the short of it is you get 12,000 square feet, 1,100 feet of shoreline and 4,000 square feet of outdoor terraces. Yee haa!

Try those dimensions on for size

Location: Houston, Texas
Listing Price: $2 million
Beds/Baths: 4/9
Sq. Ft.: 25,637
Auction Date: Nov. 5

We've hardly ever seen so much space for so little. Often, homes that are this expansive cost easily 10 times as much. But that's the nature of auctions, right? The bet -- and it's a risky one -- is that bidders, lured by the prospect of a bargain, will drive up the price. This home, heavily influenced by French Normandy architecture, brims with antique furniture and fine finishes. Special features include a 3,000-square-foot master suite, a separate media room and a, er, "hunt room."

But 25,000 square feet deliver much more than that. See what else comes with it

Location: Lago Vista, Texas
Price: $2.399 million
Beds/Baths: 4/6
Sq. Ft.: 7,894
Auction Date: N/A

Set on Lake Travis, this home offers gorgeous lake views with luxury materials like custom-made cabinetry, Amburana wood and Indian Gold granite countertops accenting its interior. 

Get a glimpse in the photos with this listing

Location: Upper Brookville, N.Y. 
Price: $3.5 million
Beds/Baths: 7/7
Sq. Ft.: N/A
Auction Date: N/A

How's that for symmetry? Not bad, but apparently that eye-pleasing vista -- plus all the other luxury features of this chateau -- wasn't enough to spur bidders at a May auction this year to meet the event's reserve price. 

Considering what this mansion has to offer, do you think it got the short end in the whole affair?  

Location: Malibu, Calif. 
Listing Price: $22 million
Beds/Baths: 6/9
Sq. Ft.: 10,480
Auction Date: N/A (reserve price was not met at  auction on Sept. 18) 

There was a lot of buzz surrounding the highly-promoted auction of this jaw-dropper in Malibu, once listed for $65 million. The bidding started at $22 million last week, but it did not reach the reserve price, a minimum amount sometimes set by the owner to ensure that the home doesn't sell too low. The failure of this home to sell on the block reveals how auctions sometimes are more marketing ploy than bona fide bidding-war. 

Get more perspective here

Location: Purchase, N.Y. 
Listing Price: $7.5 million
Beds/Baths: 7/9
Sq. Ft.: 14,000
Auction Date: Sept. 22

Only 35 minutes from New York, N.Y., this enormous house sitting on eight acres of posh Purchase, N.Y., real estate brims with mahogany and a wide array of decorative touches. The property includes a gazebo, manicured gardens and two cottages. We haven't heard back on whether the property sold on the 22nd. 

For more glimpses, see the listing

Location: Paradise Valley, Ariz. 
Listing Price: $6 million
Beds/Baths: 4/6
Sq. Ft.: 9,523
Auction Date: Oct. 20 (Absolute Auction) 

When this home hits the auction block, real theater is in store: The home will sell at an absolute auction -- the highest bidder, no matter how low his bid, takes home the, er, home. With cascading walls of glass, this Frank Lloyd Wright-inspired contemporary offers unparalleled luxury for your wealthy desert-dwelling aesthete. 

Intrigued? Get all the juicy details -- and gape at some stunning images -- by visiting the listing. 

Location: Pikesville, Md.
Price: $2.25 million
Beds/Baths: 4/5
Sq. Ft.: N/A
Auction Date: Oct. 26

Sited on eight acres with potential to be subdivided into seven additional lots, this home boasts custom finishes and grand rooms along with a guesthouse and pool. 

Learn more about the listing

Location: Charles Town, W.Va. 
Price: $1.2 million
Beds/Baths: 5/6.5
Sq. Ft.: 7,037
Auction Date: Ongoing (Current bid is $950,000) 

The Perkins House, which occupies the property where radical abolitionist John Brown was executed, was built in 1891 and retains the Queen Anne style exemplified in the turret at its front, along with other trappings of the era. The 7,000-square-foot home boasts five bedrooms, 6 and 1/2 bathrooms and four porches, along with a two-story barn (the home's original), a preserved outhouse and outdoor pool. 

See the listing or get the full story on this home's past

Location: Hollywood, Calif. 
Price: $2.395 million
Beds/Baths: 4/4
Sq. Ft.: 4,162
Auction Date: Oct. 12

The home, built in 1994, is 4,162 square feet of pure gorgeous. Just minutes from the Sunset Strip, it also has location going for it. There are four bedrooms, four baths, a three-car garage, hardwood flooring, a marble fireplace, formal dining room, kitchen, a spiral staircase, custom media room with a wet bar, and wall-to-wall windows offering scenic views.

Like the feel of this place? See some other beauties in Hollywood Hills

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