Real estate watchers have been saying it for months now: It's a buyer's market and it's only getting better.
"There are all kinds of opportunities out there for people who have money," said James Wedgeworth, a real estate agent in South Carolina. "The smart money's buying right now."
Unfortunately for Wedgeworth, no one's buying the mansion at 74 Brams Point Rd. on Hilton Head Island. He and other real estate agents have been trying to sell the eight-bedroom, 18,000-square-foot estate for about two years. Thus far features like a private deep-water dock, indoor and outdoor pools, multiple fireplaces and a home theater haven't sealed any deals. So to entice buyers, the property, which has been appraised at $17 million, is now on sale for less than $8.8 million, a discount of nearly 50 percent.
It's a great value, Wedgeworth says -- but then, why isn't the smart money buying?
"Most people," he said with a chuckle, "aren't that smart."
Wedgeworth and others say that, these days, the weak housing market is forcing sellers of everything from luxury estates -- like 74 Brams Point -- to modest one-bedroom homes to slash prices.
J. Patrick Lashinsky, president and CEO of ZipRealty, said some homeowners who have sat on the sidelines waiting for prices to rebound are now "deciding that they just can't wait any longer, they have to sell. They're pricing their homes very aggressively."
Home prices in 20 U.S. cities fell in October by a record 18 percent compared to the year before, according to the closely watched Standard & Poor's/Case-Shiller home price index. Some of today's cheapest homes are on sale by banks that foreclosed on the properties.
"It really is almost a national situation where we can find you at least one good deal almost everywhere," said Rick Sharga, the vice president of marketing for the foreclosure listing service RealtyTrac.
The deals could get better still. Sharga said that a combination of factors -- including higher unemployment, more defaults on risky "Alt-A" and "Options ARM" mortgages and the expiration of foreclosure moratoria set by banks and state governments -- will mean that foreclosures will continue to rise. That increase will result in even more houses hitting the market.
In addition, Sharga said that banks last year had many foreclosed properties that they didn't try to sell -- what Sharga calls a "shadow inventory." The banks waited, he said, either because they simply had too many foreclosures to handle or because they wanted to delay taking the write-downs that come with selling a foreclosed property.
This year, he said, those properties might finally go up for sale -- and that will boost the housing inventory even higher. The ultimate result, Sharga said, is more declines in housing prices.
"This is economics 101," he said. "You still have more inventory than you have buyers."