Housing prices tumble down

Housing boom seems to be becoming a distant memory as home sellers have started cutting down prices to lure buyers back into the real estate market after the Chicago home sales took another major hit in October.

According to the National Association of Realtors (NAR) housing has faced a decline of 3.5 percent from a year ago with the median price of a home falling to $221,000 last month. The price seems absurdly low in still expensive Silicon Valley.

October's combined single-family and condo sales in the Chicago area were 15.4 percent below last year's sales and the median price reported to be paid for a single-family home was $242,000.

Although analysts predict more price declines in coming months as the once-booming housing market undergoes a painful correction, real estate agents maintain that the boom stretched so long that most people have forgotten that traditionally buying slows down in autumn, when kids have returned to school and buyers are concentrating on the holidays.

"Everything has been so hyper exaggerated" over time, said North Side agent Pamela Ball. "I don't think the market is bad, it's just normal for fall in a normal year."

David Lereah, chief economist for the Realtors expected home prices to continue falling for the rest of the year but said, “"After a period of price adjustment, we'll see more confidence in the market and a lift to home sales should be apparent in the first quarter of 2007."

According to Robert Zoretich, president of the Illinois Association of Realtors, the market is normalizing but believes that more sellers are going to have to rethink their price expectations in order for the market to pick up."There are still people out there waiting to see prices come down," he said. "But buyers are not listening. They're really not. If people need to sell right away, they need to adjust their prices."