COPING WITH THE HOUSING SLUMP

OF4-11/2/06 9:25AM COPING WITH THE HOUSING SLUMP

The Osgood File. I'm Charles Osgood. Most of the time for decades now. housing prices have risen. and KEPT rising. But that was then. Moody's economy.com is forecasting that overall. across the country will fall three and a half percent next year. CBS News correspondent Anthony Mason spoke with Moody's Mark Zandi.

"When's the last time we saw that?" asked CBS News Correspondent Anthony Mason.

""That's unprecedented. You'd have to go all the way back to the great depression to find a year in which house prices declined." said Mark Zandi, Moody's Economy.com.

Some straws in the wind.

Home builders who have been expanding in boom times are now contracting. Hovnanian, one of the biggest, has more than 6000 employees.

"It was closer to 7. Its slowly been getting closer to 6." said Ara Hovnanian, CEO Hovnanian.

Ara Hovnanian is CEO. He tells Anthony Mason many people who planned to buy homes are getting cold feet.

"Right now, a lot of customers are saying, boy, I think this is not the right time." said Hovnanian.

"How long do you see this period lasting?" asked Mason.

"That's the million dollar question." said Hovnanian.

People with homes to sell are trying to think of ways to entice buyers. In Connecticut Lou Aloupis cut the price of his place by 60 thousand dollars. That didn't do it.

"And one night it just came to me. I said, hey, why not offer my Mercedes. And here we are." said Lou Aloupis, homeowner.

So now, the price INCLUDES the Mercedes. Ron Phipps a broker in Rhode Island. knocked more than a hundred thousand dollars off the asking price on one Waterfront home. And now.

"We're including this 33 foot sailboat as part of the total purchase price." said Ron Phipps, realtor.

With Another house:

"It's a little dated with the wallpaper but really lovely." said an interior decorator.

So Phipps is throwing in 10 thousand dollars worth of interior decorating. Anything to get the buyers attention says Phipps.

"Now the real litmus test is do we sell it." said Phipps.

The Osgood File Charles Osgood on the CBS Radio Network

The Osgood File. November 2, 2006