WASHINGTON // When Brett and Amy Morrison began house hunting two months ago, they thought they were entering a buyers' market. Property agents in Washington, DC say young buyers seeking to become first-time homeowners with the help of government tax breaks and other incentives are getting outbid by investors and even each other.

"This spring, the DC market is looking more and more like a boom-time seller market," said Sheryl Barnes of Long & Foster Real Estate

The government and the National Associations of Realtors (NAR) both recently reported a continued decline in home sales for the month of March, with the median home price down 12.4 per cent from a year ago, according to NAR. Nobody is declaring the downturn over, but NAR noted a rise in first-time home buyers, which accounted for 53 per cent of sales for the month.

. "We're seeing many, many, many multiple offers." Rod McGarty of Refin said.

Mr McGarty and his Washington-based Redfin colleague, Fernando Ferrufino, said non-bank sellers were also bringing their prices down.

But buyers like the Morrisons, lured into the market in part by reports of housing deals, have been surprised by all the other buyers. Like many Americans, the Morrisons believed owning their own home was part of the "American dream", but some academics are questioning whether this even makes sense anymore.

Much of the rise has been possible because the government has supported home ownership over the decades for a variety of reasons. Lemar Wooley, of the US Housing and Urban Development Department, said the agency has generally found home ownership promotes family stability, provides financial security, stabilises neighbourhoods and generates jobs.

"Owning a home ... ties workers down," Paul Krugman, a Nobel laureate economist wrote last year in the New York Times.

Richard Florida, of the University of Toronto, says the two key pillars of the "American dream" - home ownership and economic opportunity - might now be in conflict. "It used to be, in the old mass-production, suburban economy, that a single family home actually helped to support the economy. "Today the average American changes their job every three years. People can't sell their house, so as the economy goes down, they can't become mobile." And an immobile population cannot follow the jobs.

 "When home prices were going up 20 per cent a year, the prevailing mentality was that it was a can't-miss investment," Mr McBride said. "You now see more consideration being given to the idea that not everybody's cut out to be a home owner, nor should everybody own a home. Home ownership is not a get-rich-quick scheme. It's a long-term investment."

Last week the Morrisons signed a contract on a small house in an emerging neighbourhood in downtown Washington, DC it was the fifth home they bid on.

Rebecca Carroll - The National