Despite massive rate cuts by the FED it seems quite clear that nothing
is likely to stop the massive free fall in housing prices.   foreclosures exploded
in February increasing 60% over the same month a year ago.

The underlying problem of the current credit crisis around the world is US
housing prices.   Despite radical steps taken by the FED and the Treasury
it seems hard to believe the problems will go away until the fundamental problem
is resolved.

What’s the fundamental problem? one might ask.

Housing prices.  If housing prices don’t bottom then nothing else can.  Since so
much of the economic growth of the last 6 years has been housing driven (and
based upon growth of credit/debt) nothing can truly settle down until housing
prices stabilize.   Who knows when that might happen.   It seems to me, people
are just catching on to the problem and that despite the ranting and raving of those
on wall street, there’s been no wide spread panic among consumers.

Without deep panic or “contrition” of the market, it’s hard to believe we’re anywhere
near a bottom in housing prices (despite what your realtor might be telling you).
Naturally, some markets are further along in the correction cycle than others, but
it still seems to me that the bottom is not quite visible on the 6-12 month horizon.

Despite this fact, there are real opportunities in the market right now.   Some sellers
are really hurting and willing to sell for far less than what they once thought the home
was worth (good news for real estate investors).   In addition there are big opportunities
in foreclosures as banks need desperately to improve their balance sheets are are willing
to let the homes go at a substantial loss.

So as always, do your homework on each property you look, but it seems clear it’s going
to be a buyers market throughout 2008!