Real Estate: The Big Question

Is it time to buy? That's a question I'm frequently asked. But usually it's about the stock market. Lately, though, it's a question that's asked about real estate. Whether it's a house, a condo or a second home, people are starting to take a second look at the real estate market. That's probably because the latest statistics are making headlines.

September sales of existing homes were 6.16 million, down from 6.3 million in August -- and from 7.2 million in September 2005.

The inventory of unsold homes was 7.3 million units in September, up from 4.6 million homes listed for sale in the same month a year ago. (And there may be many more sellers waiting in the wings, planning to list their home when the market "recovers.")

Prices are falling, too. The National Association of Realtors reported the biggest drop in home prices since it began tracking the data in 1968. The median sales price was $220,000 in September, down 2.2%, following a 2.2% decline in August. These two drops are the first time median home prices have fallen since 1995.

The story is similar for new-home sales, which have picked up slightly -- a 5.3% increase over August -- as a result of price cuts and incentives offered by builders. In September, the median price of a new home dropped 9.7% compared with September 2005. The median new home price fell to $217,100, the largest year-over-year decline since December 1970.