I'd just stick to your guns and only pay what you want to for a house.  If it has sat on the market forever without a price break then perhaps the seller isn't that serious.  Or, perhaps they can't afford to sell for less.  Who knows.

We're in the Puget Sound and prices have definitely slowed, but aren't crashing.  It's also house & neighborhood specific.  It does give me pause, though, thinking about plummeting home values.

Good luck in your search!

We were dealing with the same thing last year about this time when we relocated to Wisconsin.  We were trying to sell our house amid all these reports about increased days on the market, etc. and I was getting plenty freaked out.  We sold our house in 5 weeks and had constant showings during that time, so I don't know what we were so worried about.  But it was stressful so I send my good energy your way!

Of course, you've already done that part and now you want to find somewhere new.  What I'd say out here (in and around the Milwaukee, WI Metro area) is that there are areas where prices have dropped but they are still pretty high.  (For example, my parents bought a condo this summer - the price had dropped twice in the 6 months prior, but they still paid a hefty price).  My advice is not to worry about price any more than you have to - find the house you want and then make an offer at what you feel is a fair price.  And if it's okay in the apartment and you can handle it, just let it take as long as it needs to take.

A lot of people really can't drop their prices, because it would mean taking a loss on the property with all the loans they've taken out.  We took a loss on a condo a few years ago and I don't know if we'll ever own a home again.

Stick to your guns and you'll find the right place at the right price.  You're in a better position than a lot of buyers, having already sold your home.  Consider those reports cautionary tales and don't invest in more than you can afford.

We are looking for a house in Houston, and they seem to still be selling for top dollar, at least in the area we are looking at.  I am amazed at what people are paying.  I am just going to keep looking until I find exactly what I want.  

As far as the apartment goes, remember that rent is a guaranteed loss.  If you pay $1000/month in rent and you stay there a year longer just to see if housing prices come down, your house will have to cost at least $12,000 less than the year before just to be in the same financial position.  Plus you don't get a tax break with rent.  Of course, there are plenty of risks with buying too.

but plateauing compared to a few years ago. We're a retirement community for L.A., and quite pretty in the mountains, so it's expected that the market will lag way behind what the rest of CA is doing. That is, it'll be one of the last places to crash.

I would sit and wait until you find a house you really like, over-strategery be damned. I just read a really good but long rescue diary about the upcoming recession, led by subprime morgage bubble, over at DailyKos by reform. It was long but it helped, and predicted big housing market changes by next year.

It sounds so fun to be doing what you're doing, not an arduous P-R-O-C-E-S-S from my vantage point. We are having a lovely year here, but I would so love to move near family and scout out a new place. Restless as usual....Good luck there!

i'd stay renting if you don't see a decline in prices yet.

We love going to open houses. Even now that we own a home, we still like perusing what's on the market. My husband keeps tabs on it more than I do, but he recently told me that prices in Berkeley are going down.

but you are right: There are landlords that are completely delusional like our former landlord who wanted to sell the house to us at a ridiculous price. He did not do a single repair the seven years we lived there and it was in a marginal neighborhood. My husband laughed when he told him what he wanted for it. I think he did sell the house, but I am certain it wasn't for the price he listed. Crazy.

Prices have already turned here in our part of N CA.  My next door neighbors needed to relocate for a job and had to drop their price more than 15% before it sold, and the market's still heading down.  So I'm guessing our house could go down $100K or more.  Ouch.  But I'm OK with it; if we had to sell tomorrow we'd lose our phantom equity, but we'd rebuy at the new lower price level so it's a wash.  I really don't think it matters much for current owners who aren't overmortgaged.

Since you've already sold, you're in good shape.  I'd say if you're not planning to move soon, and you find the right house with a conservative, affordable mortgage, buy it.  If nothing really calls you, you can afford to wait; maybe the right house will come down into your price range.  But once you've found what you want, just settle your family and enjoy life - you won't be harmed if you've been prudent, so don't waste time fretting over something you can't control.

It's going to take a while for sellers to realize that they aren't immune from this slump. They want to hold onto to their peak home value, reality be damned.

But as more and more subprime mortgages tank or ARMs reset and short sales and foreclosures rise, that will bring comp prices down and force serious sellers to lower their prices. So I say wait. That's what we're doing...going to sign another lease in April and start seriously looking to buy toward the end of 2008.

In my area (which is quite expensive) we have seen prices drop by about 8-10 percent since we moved here in the spring. Home prices are still insanely high and houses are staying on the market for months and months on end. The laws of supply and demand will eventually take hold again, or at least make prices closer to reasonable.

DISCLAIMER: I am an avid reader of bubble blogs and believe this was a HUGE housing bubble. So take my advice with a grain of salt...

Congratulations on moving close to your mother! It reminds me of one of those Mastercard commercials where you're tallying the costs of moving and then you get to the part where you say you live five minutes from grandma: "priceless."

Like Anu, I'm in the Puget Sound region and prices seem to be stable, not soaring anymore but also not plunging. I wonder what would happen if you made an offer below the asking price in the neighborhood where you want to live. It can't hurt. Maybe you could decide what you'd like to pay and see if they'll negotiate.

We aren't on the coast, and therefore never had the overly inflated market, but a lot of houses were being built for a few years there, and in my neighborhood, houses were selling very soon after they went up for sale.  In the past year, I've noticed a difference...houses are just SITTING.  

My daughter and her significant other just bought a house.  Very nice house in an affluent suburb.  I think they got a really good deal...the got the house at $20,000 less than the asking price.  Excellent condition, less than 10 years old and needing absolutely no work.  However, to be fair, they looked at houses for several months...maybe it has less to do with the market and more to do with their willingness to keep looking until they found the best deal.

Last week, I led my son's Cub Scout Den on a food drive.  We distributed flyers one week, then went the following week we picked up the food.  We covered the same neighborhood as last year.  The thing I noticed was that many more houses are for sale.

On my cul-de-sac, there is a house that has been on the market over a month.  2 years ago, it would have been gone in a week.

My suggestion.  Start making offers well below the asking price.  Perhaps as much as 25% below.  You will get mostly "no"s but someone will be so desperate to sell that they will either say yes or make a reasonable counter offer

My good friend is trying to buy a house through a short sale.  The only thing short about the sale, is the asking price.  Yes, you'll get a great deal on a house but you could wait up to 60 days to get an answer back from the seller's lender.  She's been waiting 6 weeks for an answer.  The seller's lender that my friend is dealing with said they have 4,000 short sales backlogged waiting to be approved.  And that's just one company.  

If you are renting like my friend, then a short sale/foreclosure property might be worth it.  I don't know how the heck you'd do it if you were trying to sell your own house, though.

I think about 15% lower than a year ago.  And houses are just not moving fast whereas they used to turn over within a week or two.  Although apparently the upper end of the market ($750k+) is still as hot as ever.  No idea who is buying those houses.

First, congratulations on the new job and the move. Funny how you were saying earlier this year that you were trying to pursuade your mom to move down to you and now you're up by her! Karma is a wonderful thing - you wanted to be closer and, abracadabra!

I think you're doing the right thing by moving into an apartment and taking your time. It must feel excruciating, but by taking your time, you suss out a neighborhood, start to get an idea of what goes into the house price, and what you want to have. There's a lot of emotion tied up in buying and selling a house - on the seller's side, there's an inflated sense of value in that it's been the seller's home (the Mastercard: Priceless emtion) and a sense of investment, which translates into either an overvalued asking price, or an inability to take a lower bid. On the buyer's side, there's a perception that there is more supply than demand (which may be true on a national or state-wide sense, but which may not be true in the individual neighborhood you're looking to buy), which leads to a lower bid. I love behavioral economics, and I wonder if anyone's studied this... may have to google!

Long story short: good luck with the process, make some bids, but don't rush yourself. So long as you're not financially stressing yourselves by staying in the apartment, I can't see the downside to waiting and getting a better deal.

the last time my parents tried to sell their house was when I was in HS in the 80s, and they hit the leading edge of the recession back then.  We couldn't sell, and we didn't move to New Hampshire.  Now, its time for them to sell the house and retire on the proceeds, and I'm seriously worried they wont be able to do it!

We're in the process of selling our house. We live in a blue-collar suburb west of Chicago. We plan to move about a mile or so over into a fairly affluent suburb when we buy. Prices there are still pretty high (it's hard to find anything decent under $500k, and many homes are more in the $650-$850 range). But, the homes that are overpriced are sitting on the market for 6+ months -- those that are listed for a fair price have been selling very fast. We've seen so many homes out of our price come down far enough that we might actually be able to afford them. Prices are slashed $50-$80k by the end of the season. Right now there isn't a lot listed in our range that we like, but hopefully by January there will be something we see for us. Otherwise, if we sell our house before we find a new one, we'll also just rent until the right place comes along.

I also come down on the side of waiting to buy.  Maybe up to a year, not only for the financial aspect, but to really really get a feel for which neighborhood, because there are so many factors which contribute to quality of life that are not obvious in a few visits to an area. Obviously the schools, but also, the parks, the walking trails, the grocery store and other errands, green space, community centers, etc.

And how cool that your husband was able to get a job elsewhere and get you closer to family. Congratulations.

RachelD