Housing market slump in economic crisis

The housing market was the first casualty of the economic crisis. But with interest rates falling, and banks beginning to lend again, many wonder if we have finally hit bottom?   

For four years the Neal family called a two-family house, in New Haven, home. They own it and live on the second floor.

"This has a lot of character, we love it, and it's been a great house," Jeff Neal, of New Haven, said. "The only reason we're selling it is because we have two kids, we're ready to have a third and we've outgrown it."

The Neals have had their house on the market for a year and a half. They're frustrated but patient.

They understand this is a tough time to sell.

"You're seeing more and more houses that are in the inventory -- I mean there's tons and tons of inventory," Neal said. "Everywhere you look there's a house for sale."

In fact, the Neal's house isn't the only one for sale on this block. A glut of available homes -- not just here, but across the country -- has been driving property values down.

Realtor Bob Fiorito says that gives buyers the advantage. But, the unstable economy makes them tentative to do anything. 

"Lots of people are nervous because of what's happening on Wall St., and what's it gonna mean on Main Street," Fiorito said.

Fiorito says Connecticut hasn't been hit as hard as places like California and Florida. But homes here have lost 10 to 15-percent in value in the last year.
 
He says things will start to rebound when people start feeling better about the economy.

"I don't think you should sit around and wait for that bottom because we're not gonna now where that bottom is until six months after we pass it," Fiorito said.

In the meantime, Neal is trying to stay positive and hoping the housing slide is coming to an end.

"There was an obvious need for a correction," Neal said. "And it seems like it bottomed out and there's a lot of good houses, so I think it's gonna start going back up."