Unfortunatly I don't think there can be a lasting recovery in the housing markets until there is a recovery in the credit markets, and given recent events I suspect we've got several rough years ahead of us.  There are still too many more financial institutions we know about with ticking timers right now, and almost undoubtadly more that we don't know about.  With the exception of Indymac we haven't yet seen significant failures in the regional banks yet, but there are dozens of good size banks that are literally walking dead at this point.  When they start failing expect the troubles to compound themselves.

I expect to see other sources of credit such as credit cards and business loans begin to lock down MUCH tighter than they are now further constraining the consumer, and I do expect much more contraction in the availability of mortgages as the regional banks begin to falter.  People are finally starting to wake up to the fact this is a system wide problem, and the government can't simply bail us out of such a systematic event.

I respect Matt and think he knows a pantload more than anyone else here... but I wonder if the credit and housing mess are hand in hand rather than one taking the lead.  If there were confindence in the housing market, prices would stabilize and some of the financials that are on the edge could lessen their losses as they dispose of property... 

Why is it that we only hear about these failures at the very end when just a few weeks ago the CEO's of these compnaies tell us everyhting is just fine.  Who knows haw many more we have not heard about.

Ironically, this might stimulate our market.  There are plenty of people holding onto their homes with their fingernails who really SHOULD sell but are waiting for the good times to return. The tightening of credit and high home heating costs may force many to downsize. This includes many on fixed incomes etc.  I have been trying to coax them to sell while inventories are still low and the decline mild. Inventories have been very low here - which in turn has kept prices high.   Price adjustments have been barely 6%.  I'm seeing only 2-5 properties coming onto the market per day in a city of about 60,000 (roughly 25,000 households)  with an annual sales volume around 600.  Lower interest rates which we are seeing are starting to push buyers off the fence along with rental rates that are rising by extortionary percentages.  But more inventory is needed to bring prices down to a point where buyers find the downside risk of a purchase more palatable.  

That’s a hell of a way to increase inventory and get the market moving, but it is what it is.

Stefan, Michigan will NOT recover until we get more industries and jobs here. We actually entered the downturn in 2001 as the Big 3 Started restructuring laying people off. Living in Ann Arbor I am somewhat insulated but as far as the state goes, we have 10% unemployment.

Actually.............the silver lining is the agents doing good, and I consider myself one, are finding a way to make it work even in a downturn.

Again, thanks for coming here.........................

Stefan - I see a return to "pay as you go" instead of charging non-appreciating assets to credit cards and home equity loans.

He Stefan,

If we listen to CBS 60 Minutes video of Dec. 14, 2008 we're only half way there.  The Alta A and the Option Arm resetting mortages places us at the beginning of the apparent second wave of foreclosures.  There predicting 50 to 70 percent rates of default.  However is we utilize the same source of forsight in April of 2005 CBS 60 Minutes Video .  The second video played the wave and promoted the fact that on the national level, home prices would continue to rise another 5 per cent each year.  Their financial expert stated that real estate never drops on a national level.  Their expert also recommended people consider re-financing back in 2005.  I guess he was right on there since few low equity position people can refinance today.

Having said that, I'll stick with both video's being over reactive and news making.  My goodness, the market may continue to slide more, however realtor associations need to begin focusing on the attainability and/or representation of home in foreclosure.  In many marketplaces including Minnesota, many of the homes (in foreclosure) listed for sale and affecting the statistical data are listed for sale and yet not attainable.  Reason include:  lack of information, disclosure, expertise.  I may be going out on the limb by saying that approx. 50 percent of the homes listed for sale and are in foreclosure are not attainable during the lender mediated position. 

JMHO

Keep us informed Stefan :)

Frank D'Angelo