Every month for more than a year, the news has been the same: Sales of existing houses have fallen.
House sales in most St. Louis area counties continue to nose-dive, falling by as much as 41 percent in one county from March 2007 to March 2008. Median prices also declined from last year throughout the region, with St. Charles, Madison and Monroe counties as notable exceptions.
In the Midwest, sales fell 15.9 percent from March 2007, while nationally they dropped 19.3 percent, according to the National Association of Realtors.
The median price in St. Louis County was $148,450 in March, up from February's $135,000. In St. Charles County, the median house price moved up to $184,000 in March, from $174,500 in February.
But potential sellers remain focused on the sluggish sales pace. Tom and Barbara Niemann put their six-bedroom Frontenac house on the market last September for $800,000. They later reduced the price by $50,000.
After getting no offer in four months, the Niemanns took the house off the market.
"I think it was the economy. Everything was just slowing down," said Barbara Niemann. "We are just going to wait it out until the highway (Highway 40) construction is finished and the economy gets better."
The couple may have to wait for quite some time. Real estate experts point to a number of hurdles facing the housing market.
— Tighter credit standards. With the subprime mortgage mess continuing to ripple, banks are turning away more mortgage applicants.
"These are people who maybe would have qualified for a loan last year," said Bob Marx, vice president for mortgages for Midwest Bank Centre in Lemay. "We are having to have some tough conversations with folks."
Prospective buyers with credit scores of 600 or less are having a tough time finding mortgage insurance, Marx said, and lenders are less willing to make loans on mortgages with relatively small or no down payments.
As tougher credit requirements eliminate some borrowers, sellers are competing for a smaller pool of buyers.
— Buyers on the sidelines. That's having a domino affect on house sales, said Tari Jacobs, a broker and owner of Concept Real Estate, based in Columbia, Ill.
"Some people that want to move simply can't because they can't sell their house," Marx said.
Jacobs has seen the greatest slowdown in the $250,000 to $350,000 price range, which is a traditional second- or third-house market.
First-time home buyers also are being more cautious, she said.
— Mortgage problems. Foreclosure rates continue to increase, which puts more houses onto the market.
And some property owners who bought at the peak of the market are being forced into short sales. A short sale is when a homeowner sells a house for less than the purchase price to avoid foreclosure. Such sales are spiking, Jacobs said.
"A couple of years ago, I couldn't tell you what a short sale meant; now I am an expert," said Jacobs. "I have six short sales listed right now and several foreclosures."
— Economic uncertainty. Rising food and gas prices and concerns over job security are making buyers jittery.
"Clearly consumer confidence, or a lack thereof, drives our market. People need to feel good to go out and buy," said Shawn Kelsey, general manager of Kelsey Real Estate Group, based in Chesterfield. "The information they receive on a daily basis is generally negative right now."
With the Federal Reserve lowering certain interest rates, and the federal government taking other steps to stabilize the economy, a market turnaround could happen in the second half of this year, said Albert Suguitan, president and chief executive of Greater Gateway Association of Realtors in Glen Carbon.
Kelsey figures there is pent-up demand, which could help the housing market in coming months.
He also offered a caveat: "If there is a further erosion of consumer confidence, a recovery could be pushed back."
Yale economist Robert Shiller, whose 2000 book "Irrational Exuberance" correctly forecast a stock market correction, said in a speech Tuesday that U.S. housing prices could fall more than they did during the Great Depression.
House prices rose about 85 percent from 1997 to 2006 adjusted for inflation, the biggest national housing boom in U.S. history, Shiller said.
"Basically we're in uncharted territory," Shiller said. "It seems we have developed a speculative culture about housing that never existed on a national basis before."
