Today we all witnessed history with the inauguration of our 44th president, a day filled with hope and the prospects of change, a new beginning. But just in case no one noticed the DOW shed 4%, led by banks and financials who finished this historic day down some 20%. I was hoping to leave that kind of bear raid behind in 08. So much for a new beginning. The positive? If there is one- everyday that passes no matter what happens, we are that much closer to getting through this. The trend has always been up, right? So all in all how bad was 2008 for the American Dream? Some of the worst hit areas have seen home values decline 30% or more. New home sales are off nearly 50% from their peaks in 2006. And 40% of homes sold in the third quarter of 2008 were either a “short sale” or a foreclosure. Prices have dropped nationally about 12%, from an average of $221,900 to $198,600. Inventory levels for homes for sale expanded to almost twice the supply that is considered balanced in the market place. A little closer to home the Illinois Association of Realtors (IAR) recently published their market data report. Total home sales (which include single-family homes and condominiums) were down 33.9 percent in November 2008 to 6,076 sales compared to November 2007 sales of 9,191. Year-to-date January through November 2008 sales were down 24.1 percent to 100,435 homes sold compared to 132,388 homes sold in the same 11-month period in 2007. Year-to-date January through November 2008, the median price was down 7.9 percent to $186,000 compared to $202,000 in 2007. The median is a typical market price where half the homes sold for more, half sold for less. For the month of November, the Illinois median price was $165,000, down 13.2 percent from $190,000 in 2007. Remember that real estate is local and each market is different, but a 13% decline around here seems pretty fair. So where do we stand moving into 2009? Do we find a bottom? Can the dream survive the meltdown? Looking forward there is no clear answer to where we are headed, but there are some optimistic factors that could help spur a bit of recovery or at least cushion the bottom. Low mortgage rates- Although the criteria to obtain loans have tightened, those who qualify will benefit from them. A conventional mortgage with a interest rate of under 5% and a down payment of 10% or more. An FHA loan is a bit over 5% with only a 3.5% down payment. For those who already own a home consider refinancing. Affordability- New home owners can take advantage of declining home prices, this means that buyers that were on the brink of home ownership will now be able to purchase. Affordability is also positive for those who are moving up to larger homes. The Obama Effect- Potential programs to stop the wave of foreclosures, a massive infrastructure project, the TARP program, and countless other bailouts. It seems that everyday something new is added to the arsenal to fight off this market downturn. I just hope we don’t run out of ammunition…