some hype, absolutely...More so,however, is the simple fact buyers have left the market..and furthermore, with the amount of homes currently for sale should suggest a similar amount of potential buyers..But everyone is afraid to step up to buy without a "contract" on their exisiting home, hence a standoff between buyers and sellers

In my area a lot of buyers are doing the wait and see approach. The market never heated up here in the Memphis area. We have traditionally seen a 3-5% rise per year in home values. This year we're seeing a drop, foreclosures are selling, there are a record number of foreclosures and that's bringing the price down. People here are sitting tight and only the people that have to sell are selling. I think a lot of people are sitting out this market not only because of media hype, but because of the foreclosures that are bringing home prices down.

The current Money magazine has a lot of real estate information. There are lots of charts etc on different areas. Memphis didn't fair too well in their assessments of markets. A lot of intesting info.

I think its a combination of hype/media hysteria, the uncertainty of the war/gas, and big developers/new homes. Why buy a used home unless its dirt dirt cheap - which of course they are not because people usually don't want to lose money. But with the number of new homes......

there is no way the price of gas affects a person thoughts about purchasing a home,ZERO relationship..

No? If you start thinking of paying more of your monthly budget for car gas, heating gas, retail goods going up because of gas - you start to hunker down mentally and financially which usually means staying put unless you absolutely have to move.

If someone runs a budget for their household that is so tight that a 50 cent increase in the price of gas affects decisions about buying or selling a home, they either are in way over their head financially in their existing home or have no business whatsoever considering buying a home..Live within your means, people!!!

oh for crying out loud

in todays $$$$, the cost of gas was more expensive in 1980 then it is today..
Gas Prices are looking very much like they did in at the peak 1980 in real inflation adjusted dollars.But the annual average inflation adjusted price in 1980 was $2.94 (in 2007 dollars). The current weekly average price is $2.92 so if prices continue at current levels for 51 more weeks we will be at the average for 1980.

I agree qdognj. Gas is a little more expensive then it was in 1969 when gas was around $.30 a gallon in the North NJ area. No big deal.

Those who believe "big oil" is reaping undue profits should buy some oil, utility stocks and join the party.

If someone runs a budget for their household that is so tight that a 50 cent increase in the price of gas affects decisions about buying or selling a home, they either are in way over their head financially in their existing home or have no business whatsoever considering buying a home..Live within your means, people!!!

Completely disagree with you. In 2005 right after the begining of the major increases I looked at an old farmhouse with 14 ft ceilings on the first floor. While I declined the house for other reasons, the 14 ft ceilings and the cost of heating were some things I focused on. They were asking over 1M for the house

"some things" meaning NOT the only thing..There are many ways to reduce energy useage, and i would never use the floor to ceiling height influence whether i'd buy a house..If the price of energy/utilities gives you concern about buying a home, you need to scale back on the price range you are looking at..If you can't afford the utility costs,likely you can't afford the home

I think the media plays too big a role in real estate. They take a few isolated cases and run wild. I just looked at the numbers here in Savannah and they've changed a little. They didn't change due to the natural market, they've changed because buyers are either scared to purchase or they are waiting for the lowest prices they can get. The only thing flawed with that, is that to know they are at rock bottom they would have had to start to increase. Some of the mortgage brokers have been saying the interest rates will be rising to 7% by the end of this year. So buyers that wait too long will lose buying power that they have right now. Don't get me wrong, there are areas that have declined significantly and are having reall issues with foreclosure. I think in general the market is good. Your home's value may not increase as quickly as it was, it may even dip a little. The real estate market is very localized.
Also as a side note: I got information that private mortgage insurance (PMI) will be tax deductible in 2007. I thought I would share that with you all.

Saphire, the market IS based on hype, just like the equity markets.

Look at the DOW, which has risen so much in the past few months. All the "johnny-come latelies" are buying in a frenzy, just because the markets are at such lofty levels, and their favorite "gurus" are telling them to buy. Of course, these same media types were screaming "the sky is falling" last summer, as if the abduction of two soldiers in Lebanon was supposed to crash the world economy.

Gas prices start to figure in when people start thinking about long commutes. Energy prices, factor in, when you get old like me and DH and wiser like others, and realize that the next house just won't have those 25 ft vaulted ceilings and two story gaping wounds of entry ways. For the average middle age middle class buyer in the burbs with kids though, I think commuting costs are starting with weigh in to their thought processes. It hurts to pay $45 to fill up your tank. But like boiling a frog most will get used to it and move back to the hinterlands.

Good point MMELKO, I live ina na area where everyone commutes by train so had not thought of the drive. I think that may become a big factor if gas goes over about 3.50 or even a little over 3, I think that is where people start to change their habits (avoiding unessessary shopping trips) and at 4 per gallon they start car pooling and the like. Money is not tight but I know when gas prices were in the 3s last summer I really cut back on unecessary drives.

As for home heating, it really depends, yes if you cannot afford the heat on a 1300 sq ft starter home with 8 foot ceilings, then yes you need to rethink your purchase. However, if the issue is a 25 ft or 14 ft vaulted ceilings on a 4500-6500 sq ft house, that can cost an extra 500 per month (over a house of the same size with ordinary ceilings). If I allocate a certain amount to my housing costs and include monthly utilities, for that 500 I can buy $75k more house. I may end up buying the vaulted ceiling one but I will buy it knowing that I am more at the mercy of oil and gas costs than in another house of similar size