Inventory is low, especially in and around Roseville, CA, and buyers are trying to take advantage of the 2009 tax incentives. There are 5 months left to get the $8000 for first time home buyers tax credit. If a short sale listing was going to go on the market today it would go past the remaining 5 months for the credit. I bring this up because there is the 90 day moratorium on foreclosures here in California, there are not many traditional sales on the market, especillay in the Sacramento Area, because most people owe more that their house is worth, so the best solution would be a short sale so that the banks don’t have to wait for the next wave of foreclosures. The new 125% loan to value refinance option is great, if you don’t live in California or have been paying on your current mortgage for 15 years, as the values have dropped on average 50-60%. I think that if the banks put as much time and effort into short sale transactions as they do the foreclosures then the markets will stabilize a lot sooner. As always the best option is for the current owner to stay in the home. But I know that in Lincoln and Roseville CA areas, as owners look around they find it less attractive to stay in their homes as it is worth less and the lender is not willing to reduce their principal balance. I talk to Roseville CA homeowners who are more willing to move and take the foreclosure on their credit, and buy a home in 2-3 years than to stay in their current home and take 10-15 years before they get the value back. I can understand that the banks don’t want to reduce their entire portfolio, but after a financial review of the client and a market analysis there might be a better solution than to foreclose on someone and as these foreclosures have a ripple effect, affecting more than just the housing market.