I see it hurting my brother already. I listed his house several months ago fro $109k. In last year's market, it should have sold quickly, probably for about $100k. It's a decent house in a nice village of newer houses that sell for $140k and up - it does need some work, but not a lot. It's move-in condition. Anyway, we've dropped the price several times and it's now sitting at $89k (I was told by other realtors at each price drop that "it won't sit long at that price"). But there it sits. It seems that every couple that comes through says that it is too much work (really, all it needs is new exterior paint and the floors of a few rooms to be refinished). People don't understand that to get a cheap house in this village, you have to expect that some work needs to be done. Buyers definitely are a lot pickier than they were a year ago because they can afford to be - there are so many more houses sitting idle on the market than a year or even six months ago.
My brother did everything right - he got a conventional, fixed rate mortgage, put a chunk of money down, made numerous improvements to the house...now he's a victim of bad timing.
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