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Housing Slump Has Bay Area Sellers Opting To Rent

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Sep 30, 2008 10:43 am US/Pacific

Housing Slump Has Bay Area Sellers Opting To Rent

MARTINEZ (CBS 5 / KCBS) ― Buyers with solid credit histories are having trouble getting home loans, home sellers have become landlords of properties they cannot move, and the mood among realtors is that things will get worse if Congress cannot pass a bailout package soon.

Home prices have dropped more than 20 percent since their peak in 2006. The median home price has declined by about 30 percent. Buyers have been stepping gingerly into the housing market.

"They're either waiting to get into the market, or they're increasing their down payments and they're keeping their fingers crossed," said Terry Murphy, executive vice president of the West Contra Costa Association of Realtors.

Even buyers with a sizeable down payment of 15 to 20 percent and good credit have been turned down. Moises Guillory, president of the Contra Costa Association of Realtors, said many sellers are choosing to wait.

"They're actually putting their homes on the market for rent because they're not able to get the sale price that they would like for those properties," he said.

With Moody's Economy.com predicting Bay Area home prices will drop at least ten percent more over the next year, Guillory said the health of the housing market depends on the expediency of resolving the financial bailout plan.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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© MMIX, CBS Broadcasting Inc. All Rights Reserved.