The government has pledged to take over risky loans from investment banks. Will this end the housing crisis? The remaining banks might see this as an opportunity and loosen the standards once again to make it easier to get a loan.

From what I've seen in the California market, I could offer an optimistic prediction that the housing crisis will be over by June of 2009. Why? There are numerous people renting for more than it would cost to get a 97% loan at our current interest rates. I just sold a 2 bedroom/2 bath 950 SF condo for $130,000 (which is less than half of what similar condos were selling for in that complex a year ago). With 3% down plus PMI, property tax and HOA dues, the monthly cost is about $1200 a month. That's easily a couple hundred dollars less than many families are paying for a two bedroom apartment in the same neighborhood right now. Don't you believe that if given a chance these people would be willing to move out of their expensive apartments and start eating up the inventory? I've met many potential buyers that are just under the threshold to qualify for a loan. We have houses here in Orange County that are selling for less than $300,000 for the first time since the housing boom. If the government bailout can stop the bleeding, we may see a run on these lower end condos and houses in spring 2009.

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