Well, here we are again! Another year older and deeper in debt (thank you Roger Miller.) Before I put quill to parchment I went back and read what I had predicted for 2007(see link at end of article).

I think I was right to predict a gloomy market and the market has indeed seen a reduction in sales volumes and sales prices. In fact, with only minor editing, I could easily re-print last year's predictions without worry.

Unfortunately for some, prices still have around 5%-10% more downward potential before the market stabilizes, which I predict may occur by late '08, early '09. I say "unfortunately for some" because lower prices are good news for first time buyers, and for those folks looking to trade up to a larger home.

It is also the reason I am at a loss to understand why the government, in a bi-partisan effort, is attempting to bail out some of those who took out adjustable loans that they could not afford, and that they now claim not to have "understood". I fail to see how manipulating the free market, in an attempt to keep prices up, is a good thing. Luckily, our inept government has structured the bail-out so poorly, that I doubt it will reach many of its intended targets. However, it will provide the politicos with "window dressing" in an election year to create the illusion that they cared.

So, back on topic, in 2008, inventory, which remains at a historically high level, will diminish for the following reason. Clearly, about half the current listings are not truly for sale. Many are overpriced and what I call "opportunistic listings"-- I.E. the owner will sell only if someone pays their inflated price. Not gonna happen. As those listings expire, and more experienced agents decline to re-list them, and novice agents go back to their original jobs, we will begin to see a return to some sort of equilibrium.

Another factor in depressing re-sale prices is the relentless onslaught of new construction. Even though housing starts have slowed, there remains an unbelievable amount of new homes being built. That is a builder's right in a free market, but it will have an effect, All of which is good news for buyers, who remain nervous, but will start to re-emerge in 2008.

Sellers are not in such a happy position but, realistically only those who purchased since 2005 are in any sort of hurt. Even in "normal' markets, it is very difficult to turn a profit on a house in only 2-3 years, partly because of closing costs. If you are just slightly upside-down in your home, my advice is to hold on and ride it out. Eventually, it will come back. The effect of running away and possible foreclosure or bankruptcy could decimate your credit rating for many years to come, so do not take those steps lightly.

Finally, whilst the housing market can be stressful at times, remember without the health and happiness of you and your loved ones, you really have nothing. What I had predicted for 2007.

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Strategies for Growth - The Big Picture (Business Strategies)
As the 2006 fiscal year comes to a close, industry professionals begin to set their sites on 2007's economic outlook. So far the prediction has been bleak at best. With national housing leader's sales and housing starts down across the board, the industry is finally coming to terms with the slowing ... more...

Investing in Houston Real Estate
During periods of time when residential real estate prices are on the decline and the news media is reporting almost totally negative information about the residential real estate market, the savvy investor seizes the opportunity to invest and holds properties for the long term. We are in one of ... more...

New Construction Sales - Are You Sure?
For those of you who considering going into new home construction sales, I wanted to pass on some things you may want to think about before making that move. I enjoy what I do, but the learning curve has been tough and I've worked hard for every penny earned. New construction sales can seem very ... more...

Third Quarter Real Estate Market Report
Third Quarter Market Report Challenges, Opportunities, and Surprises, Oh My! Someone named Anonymous once said, "Many an opportunity is lost because a man is out looking for four-leaf clovers." That quote seems to sum up the real estate market - buyers seem to be looking for some sort of incredible ... more...