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									Introduction: Housing is a form of capital. Watch the following film clip. Then, use
what you know about factor markets to interpret the story with a graph.

18:42:04                          JIM AVILA
(OC) In our 'Money Watch" tonight, surviving the cool down in the
housing industry.
      GRAPHICS: COOL HOUSING
18:42:11                          JIM AVILA
(OC) After record run-ups and prices and demand, a new report warns of
a growing decline in the once-hot real estate market. ABC's John Yang
is in the nation's capital tonight, where buyers and sellers are trying
to adjust to the changing climate.
18:42:26               MEGAN BUCKLEY, REAL ESTATE AGENT
They've already dropped the price $5,000.
18:42:28                     JOHN YANG, ABC NEWS
(VO) This weekend, real estate agent Megan Buckley, has been showing
condos to first-time home buyer, Lynn Vaughan.
18:42:35                        MEGAN BUCKLEY
Looks like new carpet.
18:42:35             LYNNE VAUGHAN, FIRST TIME HOMEBUYER
I've been waiting and saving and hoping that the real estate gods would
be with me.
18:42:42                          JOHN YANG
(VO) She may be in luck. Washington, DC's once red-hot market, is
cooling off.
18:42:47                        MEGAN BUCKLEY
Last year, things would sell within a couple days. For above asking
price or there were multiple bids. It is more of a buyer's market now.
18:42:54                          JOHN YANG
(OC) The situation's the same across the country, as home sales decline
and mortgage rates rise.
      GRAPHICS: TWICE AS MANY HOUSES AS LAST YEAR
      GRAPHICS: MORTGAGE RATES 10% HIGHER
18:42:56                          JOHN YANG
(VO) In Washington, DC, There are twice as many houses on the market as
a year ago. And nationwide, mortgage rates are 10% higher than last
year. Ron Wynn is a real estate agent in Los Angeles.
18:43:11                 RON WYNNE, REAL ESTATE AGENT
We're starting to see a little bit more sanity in the marketplace. And
a little bit more normality to our marketplace.
18:43:19                     HOME BUYER, FEMALE
So nice.
18:43:19                          JOHN YANG
(VO) If you're in the market as a buyer or a seller, there are some
things to consider. For buyers, more houses for sale, far longer time,
means you have more choices and might be able to negotiate a better
deal.
      GRAPHICS: BUYERS
      GRAPHICS: MORE HOUSES FOR SALE, LONGER TIME ON MARKET, MORE
CHOICES,
NEGOTIATE A BETTER DEAL
18:43:31                          JOHN YANG
(VO) Sellers may want to think about holding off and waiting out the
current market cycle, which usually lasts five to seven years.
     GRAPHICS: SELLERS
     GRAPHICS: DELAY MOVE, WAIT OUT MARKET CYCLE, FIVE TO SEVEN YEARS
18:43:38                         JOHN YANG
(VO) That's not an option for Josh Good, who's moving to Vancouver for
a new job.
18:43:45                  JOSH GOOD, HOME SELLER
I'm asking a little less than I purchased it for. And then there's
commissions, you know, a six percent commission, which really hurts.
18:43:51                         JOHN YANG
(VO) And economists warn there could be broader implications.
18:43:53     RYAN RATCLIFF, UCLA ANDERSON SCHOOL OF MANAGEMENT
The worst-case scenario is that the weakness in the housing market is
such a drag on spending and employment, that it tips the economy into
recession.
18:44:02                       MEGAN BUCKLEY
I think a lot of sellers are getting antsy.
18:44:04                         JOHN YANG
(VO) Something to watch since eight of the last ten recessions began
with a downturn in the housing market. John Yang, ABC News,
Washington.

								
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