Part of the Washington Stimulus Package from both last year and this year was the creation of an income tax credit for first-time home buyers. One significant change to the original credit this year was that the amount of the possible credit was increased to $8,000, up from $7,500 and that it does not have to be repaid.

Let's review the last part of this one more time. The tax credit extended does not have to be repaid. This means that if you qualify for an $8,000 credit, it is free money for you to choose what to do with at your discretion. If you have some revolving debt you want to pay off, so be it. Have a car loan less than $8,000, pay it off. Want to start a savings plan with the money because you have all your other ducks in a row? Congratulations, you are on your way!

There are some restrictions including maximum personal or household income and an expiration date of November 30, 2009 but if you qualify, get busy shopping. This is a great benefit we will likely not see again. The National Association of Realtors has reported that if Congress does revisit the tax credit, it will not likely occur before October.

Florida's existing home, condo sales up in June 2009

August 03, 2009 - Special to the Daily News

ORLANDO - Florida's existing home sales rose in June, the 10th consecutive month that sales activity showed gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors (FAR).

Statewide sales in June also increased over the previous month's sales level in both the existing home and existing condominium markets. And, for the second month in a row, the statewide median sales price for existing homes was higher than the previous month's statewide median.

Existing home sales rose 28 percent last month with a total of 15,850 homes sold statewide compared to 12,339 homes sold in June 2008, according to FAR. Statewide existing home sales in June increased 13.8 percent over May's statewide activity.

Florida Realtors also reported a 39 percent rise in statewide sales of existing condos in June; existing condo sales last month rose 8.3 percent over the total units sold in May.

Sixteen of Florida's metropolitan statistical areas (MSAs) reported increased existing-home sales in June and 14 MSAs also showed gains in condo sales. A majority of the state's MSAs have reported increased sales for the past year (12 consecutive months).

Florida's median sales price for existing homes last month was $148,000; a year ago, it was $205,300 for a 28 percent decrease. However, the statewide existing home median price in June increased 2.49 percent over May's median price; it also was higher than the statewide median price reported each month since the start of 2009. According to housing industry analysts with the National Association of Realtors (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in May 2009 was $172,900, down 16.1 percent from a year earlier, according to NAR. In Massachusetts, the statewide median resales price was $284,000 in May; in California, it was $267,570; in Maryland, it was $265,724; and in New York, it was $189,000.

NAR's latest housing industry outlook notes the $8,000 tax credit for first-time homebuyers is boosting the sector. "Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade," said NAR Chief Economist Lawrence Yun in a press release to the Daily News.

"However, the increase in sales is less than expected because poor appraisals are stalling transactions. The big question is how much the appraisal issue will impact the ability of contracts to go to closing."

In Florida's year-to-year comparison for condos, 5,241 units sold statewide compared to 3,771 units in June 2008 for a 39 percent increase. The statewide existing condo median sales price last month was $112,900; in June 2008 it was $180,400 for a 37 percent decrease. The national median existing condo price was $173,800 in May 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 5.42 percent last month, down significantly from the average rate of 6.32 percent in June 2008, according to Freddie Mac. FAR's sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state's smaller markets, the Punta Gorda MSA reported a total of 216 homes sold in June compared to 196 homes a year ago for a 10 percent increase. The existing home median sales price was $145,600; a year ago, it was $141,000 for a 3 percent increase. The market's existing condo median price last month was $140,000; a year earlier, it was $160,000 for a 13 percent decrease.

Where do home prices really stand?

NWF DAILY NEWS

June 29, 2009

WASHINGTON - Is the historic U.S. housing market crash close to being over, or is the end still far, far away?

While sales finally seem to be stabilizing, prices are still are likely to keep sinking well into next year and maybe longer. Prices have been cut in half in Las Vegas and Phoenix, according to one popular home price measurement.

But statistics like these mask the many complexities involved in trying to measure U.S. home prices.

Every home price gauge captures a somewhat different slice of the housing market, even when they all depict the same general trend.

Also, all real estate is local - some neighborhoods have largely escaped the housing bust, and price declines can vary sharply within a single metro area. In many parts of the country, faraway suburbs, where many buyers moved into new subdivisions and stretched to qualify for mortgages, have been hit harder than established, wealthy enclaves.

Here are some answers to common questions about how home prices are measured.

Q: How far have national home prices fallen?

A: It depends on what measurement you use. But according to the Standard & Poor's/Case-Shiller National Home Price index, the measure that's most widely watched on Wall Street, home prices have fallen 32 percent after peaking in the second quarter of 2006.

Q: How much will they drop in the future?

A: Analysts expect national prices to drop another 10 to 15 percent over the next year, depending on how long the recession lasts and its severity.

Markets that were last to be hit by the housing bust will be the slowest to emerge. Deutsche Bank, for example, projects prices in New York are still likely to fall another 40 percent. Los Angeles, meanwhile, has only another 11 percent left to go, according to the Wall Street firm's forecast.

Q: Do real estate agents have anything to say about home prices?

A: Yes. The National Association of Realtors' median home sales price - collected from real estate listing services around the country - is another prominent measurement. It peaked at $230,300 in July 2006 and has since fallen about 25 percent to a median of $173,000 in May.

Q: That's pretty easy to understand. Why not just use that?

A: Economists don't like using median prices because they can be skewed by a change in the mix of properties that sell in a given month.

A median is the point at which half of the prices are above, and half below. If many low-end properties sell in one month, that will push the median lower; if many high-end properties sell, the median goes higher. Economists want to make sure their data isn't distorted by those natural fluctuations.

Q: How do you fix that problem?

A: Economists have created indexes like the Case-Shiller reading that examine price changes for the same properties over time instead of calculating a median price for all houses sold during a particular month or quarter. Doing so prevents the data from being skewed by changes in the mix of houses sold.

Q: Does the government collect similar information?

A: Yes. One index, created by the Federal Housing Finance Agency, is calculated solely using loans that are bought or backed by government-sponsored mortgage companies Fannie Mae and Freddie Mac.

Importantly, that excludes many high-end properties, as well as many properties bought with some of the riskier varieties of home loans that went sour this year. Also, if an investor pays entirely in cash, those transactions are excluded.

As a result, this index paints a much more tempered picture of the housing bust. It shows home prices dropping by just over 11 percent from a peak in April 2007.

"It's missing much of the action," said Dean Baker, an economist and co-director of the liberal Center for Economic Policy Research in Washington.

By contrast, the Case-Shiller index, developed by Yale University economist Robert Shiller and Wellesley College economist Karl Case, peaked in mid-2006 and has shown far more rapid and dramatic declines.

Q: Which one is better?

A: Both are valid measurements - they just measure different things, experts say. Nevertheless, investors will be far more interested when they finally see some consistent positive trends in the Case-Shiller index - most likely a substantial slowdown in the rate of decline. That's likely to mean that the housing bust is finally wearing down.

Q: When will that finally happen?

A: It could be at least a year, economists say.

"House price trends, they're more like Mack trucks than Porsches," said Mark Fleming, chief economist with First American CoreLogic, which has its own home price index. "The truck is still in reverse."

Q: What impact do foreclosures have on prices?

A: They drag them way down. In fact, many real estate agents say that when you factor out foreclosures and other distressed properties, their markets look a whole lot healthier.

In Minneapolis, for example, median prices were down about 22 percent to a median of around $123,000 in the first three months of this year for distressed properties, but declined less than 4 percent to a median of $212,000 for traditional, non-distressed sales.

"We describe our market as a tale of two markets," said Mark Allen, CEO of the Minneapolis Area Association of Realtors.

Published on Tuesday, March 3, 2009, 7:36 AM Last Update: 13 hour(s) ago by Bob Corcoran Tags: Stimulus Package

"Whether it is the best of times or the worst of times, it is only time we have."
              ---- Art Buchwald

You had to love Art. He had some great quotes. And this one really puts things into perspective, especially for those of us in real estate.

Yes, I'll grant you that you can look at our economy and the real estate market and proclaim it the worst of times. Totally your prerogative. But please, don't call me. I avoid those who whine and complain and see the worst in everything.

The fact is - no matter what you think of today's market -- it is just as Art said, the only time we have. And as a real estate coach and consultant, my job is to help agents and brokers see how to make the most of the time they have whether it's a buyer's market, a seller's market or an alien's market. (I don't care what kind of market it is; you can still make a living if you adopt the right attitude.)

Now a couple of big events have happened in the past month that are going to cause consumers to look to real estate professionals for answers and help. Namely the Homeowner Stability Initiative and the $8,000 tax deduction for home buyers.

The stability initiative is President Obama's $75 billion, three-part plan that will give low-cost refinancing for about five million Americans, provide financial incentives to lenders and create a new insurance program to promote more mortgage modifications.

And the tax deduction, now signed into law, lets first-time buyers claim a credit worth $8,000, or 10 percent of the home's value, whichever is less - on their 2008 or 2009 taxes. A big plus is the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount.

So how do you capitalize on the Homeowner Stability Initiative? Let me share a sentence I tell all my clients: Your whole life changes the day you make a commitment. 

You capitalize on this or any other time by making a commitment to being the best agent or broker you can be. Right now. Today. In other words, become the expert and market yourself as that expert.

This is a time when consumers desperately need answers, guidance and counsel. So my advice is to develop summaries of these events and how they can help consumers, and then put them on your website, your advertising, your letters - everywhere you can.

Doing this positions you as the pro in the field. And create a question and answer document - get the word out about what this all means for the consumer. Maybe even do a short seminar at your local library.

Bob Corcoranis a nationally recognized speaker and author who is founder and president of Corcoran Consulting Inc. (CorcoranCoaching.com, 800-957-8353), an international consulting and coaching company that specializes in performance coaching and the implementation of sound business systems into the residential or commercial broker or agent's existing practice.    

Federal Reserve Surprises Financial Markets

Here we go again, with the talking heads on financial news misinterpreting the impact of the Fed's actions on home loan rates.

Here's the scoop. What the Fed just announced is huge - they have committed to buy another $750B in Mortgage Backed Securities, and $300B in Treasuries.

But what does this mean and why do you care?

Their actions provide a demand for Mortgage Backed Securities, which should help keep a ceiling on home loan rates moving much higher in the foreseeable future. That's good news, for homebuyers who are seeing the bargains out there and understanding that now is the time to act. Good news for those who are ready to refinance too.

But an important distinction - this does not mean rates may move significantly lower. Depending on exactly which coupons the Fed purchases when they go shopping for Mortgage Backed Securities, their actions may keep a lid on rates, but not push them very much lower. And based on what they've been buying since the beginning of this year when they started their purchasing program - that is exactly how it has played out.

Present home loan rates are within inches of historic lows. What is keeping you on the sidelines from acting now to refinance and get some dollars back into your own pocket, where they belong - or moving forward to buy the home of your dreams, while it is still on sale?

Unlike densely populated South Florida or theme-park epicenter Orlando, the western panhandle of Florida has no big cities, and trendy nightclubs are few and far between. The region is not exactly sleepy, with plenty of golf courses and resort developments, but for many years it hasn't drawn much attention from second-home buyers beyond nearby Louisiana, Texas and Alabama.

Not so any longer. Attracted by some of the best values in Florida (not to mention some of the state's most acclaimed beaches), buyers from all over the USA and Canada are heading to south Walton County. A new international airport scheduled for 2010 may bring them from even farther.

The main selling point is sand, so soft and white locals call it "sugar sand." The 26-mile stretch of coastline that constitutes the beaches of south Walton County has 14 towns or communities - including Seaside, the locale for the fictional picture-perfect town in the film The Truman Show. All 26 miles have been certified "Blue Wave Beaches," an environmental seal of approval from the Clean Beaches Council.

The entire strip is on a narrow peninsula between the Gulf of Mexico and Choctawhatchee Bay. More than 40% of the region is owned by the state and protected from development. There are numerous state parks and preserves, as well as an extensive network of protected sand dunes. All of it is linked by more than 200 miles of bicycle paths and hiking trails. But the landscape is not all nature: The strip has about a dozen golf courses.

The 14 communities are each distinct - some gated, some not; some planned, some evolved. The best known are Sandestin, Seaside, WaterSound and WaterColor. Among them, they contain an array of restaurants, art galleries, shops and recreational facilities. Most have a mix of houses, townhouses and condos. Prices also are diverse, from just over $100,000 to several million dollars.

"Compared to south or central Florida, we have a huge variety of product with a large number of affordable homes," says Joe Bracciale, director of real estate sales at Sandestin.

A look at three south Walton County neighborhoods

• WaterColor. This 500-acre mixed resort and residential development (watercolorflorida.com), designed in traditional Southern style, includes a boutique hotel, spa, beach club, marina, shops and restaurants. Residents also have access to a nearby Tom Fazio golf course. Home sites range from $96,000 to $1.5 million and houses from $575,000 to $4.6 million. The master plan calls for 1,140 homes.

• Sandestin. This huge development (sandestin.com) contains 30 subcommunities on 2,400 acres with thousands of homes and condos, some in high-rises. It also has four golf courses, a tennis club, spa, marina, 7 miles of beach and coastline, a shopping center, pedestrian retail village, 20 restaurants and several hotels. Condos begin as low as $129,000, and houses run as high as $3 million to $4 million, but "the majority of our residences are in the $250,000-$600,000 range," says Joe Bracciale, director of real estate sales.

Town of WaterSound. A sister property to WaterColor, this development (watersoundbeachclub.com) includes three neighborhoods, all designed in an architectural style inspired by Nantucket. WaterSound Beach is a gated, 256-acre beachfront community with mostly private homes. It has lots from $275,000 and houses from $865,000. WaterSound West Beach is a 62-acre coastal community surrounded by protected land with fewer than 200 home sites. Lots begin at $159,000 and houses at $699,000. WaterSound, on 1,400 acres, has the most residences planned, more than 1,200, and the most amenities, including a golf course and extensive trails. Lots start at $59,000 and houses from $459,000.

http://www.usatoday.com/travel/destinations/secondhomes/2009-01-15-south-walton-florida_N.htm

Fannie Mae Rescinds 4-Property Maximum:
Up To 10 Properties Allowed For "Bona Fide" Real Estate Investor

Most people agree - purging home inventory is paramount to the housing recovery, Fannie Mae just made that recovery a lot more likely.  Effective immediately, Fannie Mae is rescinding its 4-financed-property per person restriction.

Fannie Mae is committed to providing financing opportunities for high-credit quality, bona fide investors.  Experienced investors play a key role in the housing recovery.

The use of the adjectives "high-credit quality", "bona fide" and "experienced" was a conscious one, by the way.  Fannie Mae is averse to first-time investors and other foreclosure opportunists.  Instead, it wants to serve individuals with a history of owning and successfully managing rental property.

To that end, Fannie Mae will now finance the purchases of 1-unit homes for investors with an interest in between 5 and 10 properties provided that all of the following guidelines are met:

•   25 percent down payment on the investment property

•   Minimum credit score of 720

•   No mortgage lates within the last 12 months

•   No bankruptcies or foreclosures in the last 7 years

•   2 years of tax returns showing rental income from all rental properties

•   6 months of PITI reserves on each of the financed properties

And lastly, to reduce fraud, Fannie Mae will now require all real estate investors to sign a form granting lenders permission to verify supplied tax returns against the official, IRS-filed version.  This document is less commonly known as a 4506-T.

But lest we think this guideline change is Fannie Mae's olive branch to the people, let's remember that our nation's banks are holding record numbers of foreclosed homes on their balance sheets right now while the most likely buyers of those homes have been to-date locked out from financing. 

Real estate investors want to buy REO but Fannie Mae had made it impossible. The guideline change is meant to extend banks and lenders a lifeline first; bringing experienced investors back into the fold is just how it's getting done.

That said, real estate investors are lovin' it.

For the first time since September, investors can go to auction and know that (relatively) cheap financing will be available from the government.  This should speed the reduction of REO inventory nationwide.  In addition, with more investors eligible for financing, expect greater competition for prime foreclosed properties, helping to keep home prices from falling into the abyss.

The rollback gives a secondary benefit to investors, too -- even those not buying additional property. 

See, when the 4-property restriction went into effect, it was a surprise, 11th-hour announcement made on the Friday before Fannie Mae's nationalization.  This date, meanwhile, has come to be known as the Day Before The Refi Boom Started. 

So, on the following Monday, when mortgage rates instantly plunged three-quarters of a percent, homeowners with 5 properties or more found themselves ineligible.

They couldn't refinance their investment homes, they couldn't refinance their vacation homes, and they often couldn't refinance their primary homes, either. While rates fell for nearly every borrower class, experienced real estate investors were locked out.  Today, that's no longer the case. "High-credit quality, bona fide" real estate investors are back in the game.

It's good for them, it's good for the banks, and it's good for housing.

Not every bank sells loans to Fannie Mae, however, so if you think the new guidelines will impact your mortgage plans, be sure check with your loan officer first. 

The foreclosure totals for 2008 are in, and the numbers are staggering. Nationwide, foreclosures were 81% higher than 2007. The news in Bay County/Panama City is even worse.

Last year, almost 21-hundred Bay County homes or condos were in some stage of foreclosure, and increase of a 168% from 2007, and a 400% increase over 2006.

Other area counties had similar problems.

Franklin County, Apalachicola, 2008 foreclosure rate was up 241% over 2007.

Okaloosa County, Fort Walton Beach/Destin, increase was similar to Bay County's.

The most dramatic increase in foreclosures came in Walton County, Santa Rosa Beach/Miramar, where the totals jumped from 263 to 1,086...a w hopping 313% increase.

Overall, Florida had 385,000 foreclosures last year...up 133% over 2007.

PORT WASHINGTON, N.Y. (MarketWatch) -- And now for some good news: The mother of all housing corrections appears to be nearing an end.

Nationwide, prices of new and existing homes are now only about 7% away from being as affordable as they were during the 1980s -- when the housing market was booming. At that time, median home prices equaled 2.9 times median household incomes.

To put this in perspective, at the apex of the bubble back in 2006, median home prices sold for about 4.5 times median incomes. In some markets they were actually twice as high -- clearly an unstable level that required creative lending and a bubble mentality among buyers and bankers alike.

For this key ratio to fall this far this fast required a combination of rising incomes -- and sharply falling housing prices. During the past three years personal incomes rose a total of 10% while home prices dropped by some 23%, on average.

This implies that by the time home prices bottom out, they will have fallen a total of 30% from their 2006 highs. In those markets where housing really got overheated, prices are already down by as much as 50%!

When combined with today's ultra-low mortgage rates, homes in many parts of the country may already be as affordable as they were in the halcyon days of the 1980s. Don't forget, in some areas home prices never bubbled up in the first place, so they have been priced right all along.

All that is needed now is a good dose of buyer confidence -- and a willingness on the part of the banks to resume lending to those who qualify for a mortgage.

Needless to say, unlike their counterparts of the bubble era, today's home buyers will be required to have some skin in the game. In other words, they will have to put down 20% or more. They will be required to document their incomes and be sure that the home they wish to buy is appraised at a realistic price.

From a seller's perspective, homes that are priced realistically (say, 30% off their peaks, or in some cases not more than three times local incomes) will sell the quickest. Keep in mind that even at these seemingly depressed levels, most houses will still fetch prices well above what they were in 2000.

Another piece of good news is that once housing prices touch bottom, it follows that the value of mortgage-backed securities will materialize as well. This is the sine qua non for thawing out the financial markets, for it will make the banks confident enough to resume lending -- first to each other, then to business and finally to consumers.

And once money begins circulating throughout the economy, many businesses will revive; they will stop firing and start hiring. For their part, consumers will resume spending -- which, in case you did not notice, now accounts for 70% of our gross domestic product.

So the Obama administration may not have to devise another plan to fix the economy. It could well be on the way to mending itself.

Irwin Kellner is chief economist for MarketWatch, and is Distinguished Scholar of Economics at Dowling College in Oakdale, N.Y.

The truth is that Distressed Sales have become all too common, but there are few bright spots!  There is no question that the market will take an upswing.  Buying distressed property now is a fantastic way to position yourself positively for that inevitable turn upwards.

The advantages that a successful short sale brings to the homeowner are too numerous to list, but they include the end the foreclosure proceedings against the borrower, lesser negative impact on the credit history (compared to the impact a foreclosure would bring), ability to maintain current employment and obtain future employment. A short sale is a complex, detailed and time consuming transaction and a distressed homeowner's financial future solely depends on his/hers decision of hiring a professional who specializes in and is an expert on short sales.

Here is a great article describing the typical distressed sale scenario:

The so-called "short sale" of a home can be a viable alternative to foreclosure and will become more prevalent as millions of adjustable-rate mortgages reset over the next 18 months, real estate industry observers say.

Short sales, an agreement that allows a home to be sold for less than the amount owed, have been around for a long time, but have come to prominence lately because of the unprecedented increase in foreclosures, said Arthur Marvin, broker for Wingate Mortgage Group in Las Vegas and class instructor on foreclosures and short sales.

"That's a lot of homes that are short sales and every one of them is overencumbered," he said. "It's grown exponentially since last year and it's going to keep on going. Just a reminder -- there is an epidemic going on across the United States and they're called foreclosures. Foreclosures are causing another epidemic called short sales."

The beneficiary, or lender, makes the final decision in approving a short sale.

While short sales are by no means a slam dunk, lenders are more willing to negotiate with borrowers today who are in default on their mortgage payments, Realtor Robin Camacho said.

"What they want upfront is a hardship letter from the seller, a contract between the buyer and seller and an estimated settlement statement," Camacho said. "They may counteroffer and you continue to negotiate. They're a lot more negotiable than they were six weeks ago."

Yenory Orange, REO managing director for Green Lockett Realty, said the last thing a bank wants to do is foreclose on a home. If a bank puts the house in foreclosure, it has to clean it up, paint it, replace the carpet, list it on the market and pay a broker's commission, she said.

Realtors need to build a relationship with the bank on a short sale, Orange said; they should meet with the loan officers and provide them with as much data as possible on the house and the market.

Financially troubled homeowners save the embarrassment and marred credit associated with a foreclosure. Investors and entry-level buyers have the opportunity to buy a home below market value. Lenders avoid the hassle and expense of seizing a home and putting it up for auction.

Short sales can occur before a home goes to foreclosure or while it's in foreclosure, Marvin said.

"The premise is that both are in trouble. The difference between a foreclosure and short sale is you can be in foreclosure and not be encumbered (in debt)," he said. "A short sale has no equity."

Potential buyers need to understand a short-sale transaction before entering any purchase contract, observers say. While a buyer and seller may agree on the price, the short sale occurs at the sole discretion of the existing lender or servicing company.

"Remember, lenders are not looking to bail out borrowers who simply overextended themselves during the recent real estate boom," an article in You magazine said. "In most cases, a lender will only consider a short sale if a borrower has clearly suffered a serious financial hardship that directly caused him or her to default on the mortgage."

Short sales are a common practice within the mortgage industry and are determined on a case-by-case basis, said Patrick Carey, head of default and retention operations for Wells Fargo Home Mortgage.

Most homeowners are in default when they apply for short sale. It's an option based on the value of the property, the underlying fundamentals of what is owed and the anticipated marketing time.

The investor has predetermined guidelines for the shortage along with the minimum amount they will take in the loan sale. When the sale proceeds do not satisfy the remaining balance, the post-sale balance is forgiven. The credit is then reported as satisfied for "less than full" amount, Carey said.

"While banks still realize large losses on short sales, there are some benefits, including the elimination of foreclosure attorney fees and costs, the marketing costs should the property go to REO and any potential risk of damage or deterioration due to prolonged vacancy," he said.

The bank's denial of a short sale is not necessarily a final "no," Marvin said. Brokers can take the process further by providing the lender with a forecast loss analysis, negotiating their position that the offer may be the best and highest benefit to the lender's investor, he said.

"The lender uses software to calculate if we let it go to foreclosure, how much do we lose? If we let it go to a short sale, how much do we lose? Whatever is less, that's the one they want. These two (foreclosures and short sales) are in competition with each other," he said.

Because foreclosures take at least five months from notice of default to final eviction and trustee sale, some homeowners find it financially advantageous to remain in the home without making payments rather than sell at a loss and move somewhere else.

"That's the $64,000 question," Marvin said. "Should they live in it and let it go to foreclosure or sell in a short sale?"

The Federal Reserve has tried to bail out the financial and credit markets by recently cutting its discount rate and infusing billions of dollars into the banking system. The real estate market, however, continues to suffer. Foreclosures are nearly double from a year ago and home prices are down 5 percent to 10 percent around the country.

Inventory of homes on the market exceeds a 36-month supply in some parts of the country. The Greater Las Vegas Association of Realtors reported 24,341 homes for sale in August and sales of 1,316 single-family units, about an 18-month supply.

So far this year, 731,244 preforeclosures have been filed nationwide, Sacramento, Calif-.based Foreclosures.com reported. That translates to nearly 10 out of every 1,000 households in trouble with their mortgages.

It's a dismal picture, but one that may brighten for some homeowners thanks to changes in the Federal Housing Administration's lending practices, said Alexis McGee, president of Foreclosures.com.

"As far as short sales, those will continue to grow as folks with little or no equity realize they can't hold on," she said. "The problem is, most banks are not really discounting for investors yet on these properties. We need 30 percent and more off the house to make the numbers work to buy, fix and sell. Their 10 (percent) to 15 percent off is simply not enough for investors, but may work for home buyers interested in a small deal."

In his column, "Eye on the Economy," National Association of Home Builders Chief Economist David Seiders said continued growth in the nation's economy is the best guarantee of a revival in demand for new and existing homes.

Beset by mortgage market woes, eroding house values in a growing number of areas and "a hefty shove from the media," housing is continuing to lose momentum, Seiders said.

"But these negatives do not mean that housing will continue downward forever," he said. "As long as the overall economy continues to expand, with the Fed's help, throwing off decent growth in employment and household income, ongoing population growth will generate decent growth in the number of households and that's the key."

Despite the current mortgage credit crunch, which is most pronounced in subprime borrowing, Seiders noted that there remains significant favorable financial support for prospective home buyers, particularly in the FHA and VA and prime conventional conforming mortgage markets.