Sweet Home Chicago

Bankers/Lenders Holding Up Real Estate Market Recovery - Part III

Please read my prior two posts for more on this topic.

The Foreclosure Dilemma

When a bank forecloses on a home, the homeowner is usually in a very bad financial situation.  They didn’t just wake up one morning to find their banker knocking on the door to take possession of their home.  In Illinois they usually have missed at least a year of payments before the bank will actually move forward with the foreclosure process (though by that time they have already sent several legal notices and warnings).  So it should not be a surprise to anyone that some of these home owners go take unusual steps to get some cash.  It is not uncommon to find a bank-owned home that is missing things like doors, door knobs, appliances, lighting fixtures, etc.

I was working with some buyers that found a terrific bank-owned home that was in fairly decent condition, except for the kitchen.  The former home owners had hired someone to remove everything from the kitchen and sell it so they could get some cash.  All that remained in the kitchen was the walls and hookups for gas, water and electricity.

My buyers were actually happy about the kitchen because they were planning to start building their dream kitchen immediately after the closing.  Unfortunately, their financing fell through just days before the closing.  The bank they were working with denied the loan because there was no kitchen in the house!  The buyers were willing to put money in escrow for the kitchen build-out, but that did not change the banks’ position – no kitchen, no mortgage.  I’ve learned that this is a fairly common issue these days when people try to purchase a foreclosed home.  And of course the bank that owns the property has no plans to put in a basic kitchen in order to get the house sold.

The only buyer that will be able to purchase this home is someone that has cash or someone that can get a construction loan.  I’ve learned that a construction loan requires a higher down payment and has a higher interest rate than a conventional, FHA or VA loan.  There does not appear to be a lot of buyers in this market that are in a position to get a construction loan.  And so this house will continue to sit on the market and the neighbors will continue to be concerned about the vacant home on their street, and the bank that owns the property will continue to rack up holding costs while the value of the home continues to decline.

Why can’t someone at one of these banks make an exception to their rules in order to get this house off of the market?  The bank that owns the property can put in a few basic appliances, cabinets and a sink, and then the home will sell and they can get it off of their books.  Or, why can’t a bank give a mortgage to a qualified buyer that is willing to put money in escrow for the kitchen build-out?  The buyer doesn’t want/need a construction loan – they are just building a new kitchen.  I really don’t see how  this is different from a home that has a very old out-of-date kitchen that a new buyer is going to rip out and re-build.  I just sold a home like that – they buyers are going to re do the kitchen before they move in.  If anyone knows why this is a GOOD reason to block the sale of a home, I’d love to hear about it.  It makes absolutely no sense to me.  And given all of the foreclosures out there in the same or worse condition, there has to be some logical way to get new owners into these homes quickly.

Your comments and insight are welcome!

Thank you for reading!

Bankers/Lenders Holding up Real Estate Market Recovery, Part II

As a real estate agent the scenario that I described in my last post is very frustrating on a personal level.  Many agents, including me, find themselves going through the sales process multiple times for each buyer.  Unfortunately, we only get paid when there is a transaction.  This is a real hardship for the agents. 

Unfortunately the real "crime" here affects the whole market.  There are many of these short sale properties sitting on the market and the banks still have not figured out how to improve the process so that these homes can be sold in a timely fashion.  It is perfect example of the lack of understanding the banks have for the real estate market.  Once a buyer finds a home that they want to buy, they are not usually willing to wait for several months to find out whether or not they CAN buy it. 

Here is my next story about "banks behaving badly"

The Short Sale Side Step

I was representing a seller of a short sale property.  We had several offers that were very low, and then finally one offer came in that was more reasonable.  We sent the offer into the bank with the short sale package.  In this case there were two banks involved (1st mortgage and second mortgage).  After months and months of negotiation with both banks about a short sale deal that would be acceptable to everyone involved, we finally had a deal.  But then in the 11th hour, the bank with the first mortgage backed out of the deal and decided to just go forward with the foreclosure instead.  Why?  Well, it turns out that someone in managment at the bank with the 1st mortgage decided that they didn't want to do a deal with the other bank - they didn't "like" them and didn't want to do business with them! 

And now the house is foreclosed and the value has gone down further (it is almost 10 months since the original offer, and about 5 months since the bank denied the short sale).  They former owners are about to move out, and the home will be vacant.  The buyer from the short sale still wants to purchase the property and has asked me to represent him.  He would prefer to buy it as soon as possible so that the amount of time that the property is vacant is minimized. We submitted a written offer to the bank immediately after the foreclosure for the same amount as his offer 10 months ago.  (Now that the property is foreclosed there is only one bank to deal with.)  Since there is only one bank, and my buyer offered to pay ALL of the closing costs for both sides, this would be an incredible deal for the bank.

And, to our amazement, the bank declined the offer.  The department that we were dealing with tossed the file to another department and is letting them handle the next steps.  They made it sound like they didn't want to have the loss on their books, so they are pushing it off to another department.  It appears that the bank is going to list the property with another realtor (not from the area) though I have not been able to confirm.  This is not over!  In the end, I am certain that the bank will have lost much more on this home than they would have if they had taken the original short sale that was offered or the more recent offer immediately after the foreclosure.  Meanwhile they have had to pay property taxes and if the property is listed they'll have to pay commission to two Realtors instead of one, not to mention closing costs.

Tomorrow, another tale of bankers' misguided actions...

Thank you for reading!

To see any home for sale in the Chicago area click here.

To get information on foreclosures anywhere in the USA click here.

Bankers/Lenders Holding up Real Estate Market Recovery

You've heard that the inventory of bank-owned home is at an all-time high, and that it is going to grow even more in the coming months.  And, you've heard that this is going to cause prices for all homes to remain low and possibly decline further.  But what you haven't heard is that the action (or inaction) of many banks is preventing the timely sale of these properties and making the problem much worse than it needs to be.

Over the next couple of days I will be sharing some examples of the irrational and inept behavior of some banks that I have encountered. Here is the first one:

The Short Sale Shuffle

My buyers put in an offer on a home that is a known short sale (owner owes more to the bank than the property is worth).  The homeowner accepts the offer and then submits the offer and a short sale package to their bank that holds the mortgage.  The short sale package is documentation from the homeowner to show that they cannot make up the difference between the contract price and the amount owed to their bank.  The next step is to wait for the bank to approve or disapprove of the short sale.

Typically the banks are taking as long as 3 months to make this decision.  So what happens during this waiting time?  The buyers find something else to buy.  This has happened to me several times - I end up "selling" the buyers two or even three houses before they actually make it to the closing table. 

And what happens to the short sale homes? After a while, if the owners are having financial difficulties and they cannot get a short sale to stick (in part because the banks take so long to make a decision), then the home ends up in a foreclosure.  I've seen several foreclosed properties that have been vacant for an extended period of time before the banks put them on the market.  By then the homes have fallen into disrepair (most typical issues around here are mold and/or water damage) and the value plummets.  Eventually the bank sells it for even less than they would've gotten at the short sale, and they've also had to pay additional holding costs including property taxes and utilities.

In my opinion the banks are shooting themselves in the foot by not getting on the ball and making these short sale deals a priority.  Also they need to be more realistic in determining what price they will accept for these sales.  They can hire and train temporary staff to get the work done in a timely fashion - I am sure that there are plenty of unemployed people that could be trained to do this AND I am sure this would have a better impact on their bottom line than the status quo.  While it is true that they are losing money in the short sale scenarios, by the time a property goes through foreclosure the losses are even greater.  The goal should be to minimize their losses.

Thanks for reading! Your comments are welcome.

By the way, if you are interested in foreclosed properties, go to my new site:  North Shore Foreclosures to get info on foreclosures anywhere in the country. 

Deed in Lieu of Foreclosure - defined

I've said this before, but it should be repeated.   I'm not a lawyer, and I've never even played one on TV.  But in this unusual real estate market, I am learning very quickly about all the different ways that lenders and sellers can reconcile a mortgage agreement gone sour. 

Deed in Lieu of Foreclosure is when the homeowner basically throws up their hands before the foreclosure process even begins, or maybe during the early stages when they've missed some payments, and just hands over their home to the bank.  This skips the foreclosure process and allows the homeowner to just move out and get on with their life.  In some situations homeowner can negotiate the timing of when they will actually move out.  The one catch is that you've got to try selling the home before the bank is allowed to go forward with Deed in Lieu of Foreclosure.  I'm not sure why this is the case, but apparently that is the law.

I learned about this because I have two properties that I am trying to sell that may end up back in the bank's hands (via Deed in Lieu of Foreclosure) if I don't sell them within 6 months.  Both owners owe more to the bank than the properties are currently worth, so they are both short sales.  You can check out my archives for previous posts on short sales if you want more information on that.

Short Sale in Highland Park - 2206 Kipling 

Short Sale - Vacant Land on Westview in Des Plaines   

Contact your lawyer if you need more information about your particular situation.  Or, I know two lawyers with expertise in this area - give me a call for a referral: 847-226-5594

As always, if you know someone that is thinking about buying or selling a home, please have them give me a call.  To search for any property for sale in the Chicago area, go to my website.

Thank you for reading!

nsk

Short Sale Basics for Sellers

The first thing you need to do if you want or need to sell your home is to determine the likelihood that it will be a short sale.  The formula for this rather straightforward – the difficulty lies in determining how much your home will sell for in this situation. 

Let’s start with the “easy” side of the equation.  Add up all of the expenses related to selling your home, including the following:

• First mortgage
• Home equity line, if any
• Real estate taxes due for prior calendar year(s)
• Estimated real estate taxes for the current time period, up to the date of closing
• Any other liens on the property.  (If you had some work done on your home and you didn’t pay the contractor or other service provider, they may have put a lien on your property.)
• Lawyers fees, real estate sales commission
• Miscellaneous closing costs including survey, title fees, etc. (contact me for a detailed list)

Then you need to consider what your home will sell for in the current market.  Bear in mind that if you are in a short sale situation, the home will sell for less than a comparable home that is not a distressed property.  For buyers, purchasing a home through a short sale has a lot of uncertainty and risk.  So, they expect to save some money on the purchase.  In general, banks appear to be approving short sales at prices that are around 90% of the current market value.  Use this as a rule of thumb, not as fact.

The best way to determine what the home will sell for is to work with a Realtor who is familiar with your neighborhood.  There are some on-line resources that you can use as a starting point, such as www.zillow.com, to roughly determine market value.  However, the computer-generated models used by Zillow and other value-estimation web sites cannot replace the insight and expertise of a Realtor.  These programs utilize publicly available information on homes that sold, but they cannot take into account the condition of the homes, recent updates, and location factors such as busy streets, train tracks, walk-to-town, etc.  Your local real estate agent will have a lot of information on all of the variables that will affect your sale price.

As a seller of a short sale property, you should try not to be personally sensitive about the price.  At the end of the day, you will not see any proceeds from the sale.  Your objective is to sell the house for a price that the bank is willing to accept to pay off your debt to them, and to any other lien holders.  In fact, if you are in default on your mortgage, or at risk of being in default, then you will need to price it low enough to ensure a quick sale and avoid foreclosure.

When the expected sale price is less than all of your anticipated closing costs, then you will be in a short sale situation.

The next step is to assess your financial situation.  If you have the financial means to make up all or some of the difference between the short sale price and the closing costs, the bank(s) will insist that you do just that.  On the other hand, if you cannot make up the difference, then you have to go to great lengths to prove that to the bank(s).  Once you have a buyer the bank(s) will require that you complete a short sale package.  This may include any or all of the following:

• Tax returns
• Pay stubs
• Letter describing your hardship, explaining why you can’t bring any cash to the closing
• Authorization for you lawyer and/or Realtor to speak with your mortgage holder
• Bank statements (NOTE: Banks cannot require you to use your 401K funds to make us short fall on a short sale)
• Complete investment information
• If you have your own business, you will need detailed documentation of assets and liabilities.

If you have two liens...  If you have both a mortgage AND a home equity line with different lenders, the short sale process becomes a bit more complicated.  After you find a buyer, then the short sale needs to be approved by TWO lenders.  The first lender's goal is to minimize their loss on the loan, and will not be willing to allow a large amount of the purchase price to go to the second lender (the home equity line).  However, the property cannot be sold if there is a lien on it.  So the second lender does have the right to demand some payment at closing.  Here is an example of a typical deal that the second lenders have been getting:

• Cash at closing for small percentage of what is owed.  For this payment, the second lender will release their lien on the property so that the closing can actually take place.
• The seller signs a promissory note for 10 - 25% what is still owed to be paid out over a fixed time period (maybe 10 years) at no interest. (Use these numbers as guide, these will vary depending on how much is owed.)

Forgiveness of debt can be a huge benefit of a short sale.  Be very careful and ask a lot of questions about this.  Right now if the bank(s) forgive your deficient balance you will receive a tax form from them reporting this amount of money to the Federal Government as income.  However, for 2009 tax year in many situations you will not have to pay taxes on this amount.  I am not sure what will happen next year. Consult your tax adviser for more information on how this works.  

The most important piece of advice I can give you is to work with a lawyer that has plenty of experience with short sales.  You need a lawyer that is going to go to bat for you and work out a deal with the bank(s).  This isn't easy and not all lawyers, and not even all real estate lawyers, are willing to put forth the extra effort required to make this happen.  You also need someone that is going to take the time to make sure that everyone involved is kept informed on the status of the deal.  Many short sales fall apart because the buyers get tired of waiting and waiting to find out whether or not the banks are going to approve the deal.  They want to know what is going on, and they are starving for information.  If they don't get any information or updates, then they cancel their offer and find another house.  Call or send an email to me - I have found a couple of terrific attorneys that can help you out.

Thanks for reading.  To see all homes available for sale in the Chicago area click here.  You can also find info on homes that already sold, open houses, and much more at the same site.

nsk

Short Sales 101

Over the past several months I have had a lot of first-hand experience with short sales.  So now I am ready to share what I've learned with my readers.  I am not a lawyer, so don't take any of this as legal advice (I can refer you to a couple of terrific lawyers who can help you with your specific situation).  I have consulted with several lawyers that are experts in this area - so I will share with you what I have learned from them and from the school of hard knocks.

First some definitions and explanations:

Short sale- In real estate, a short sale is when a piece of property is sold and the amount of the sale does not cover the outstanding mortgages AND all of the closing costs, including things like real estate taxes, state and local transfer taxes, condo association dues owed, commission to Realtor, lawyers fees, etc.  In today's market some of the properties that are being sold short are at risk of foreclosure.  It is important to understand, however, that NOT ALL SHORT SALES are at risk of foreclosure.  If the home owner has been paying their mortgage and home equity loan in a timely manner and their real estate taxes are current, then they are just "victim" to the market which is experiencing declining real estate prices.

Foreclosure - Basically foreclosure is the process whereby a bank or lender can repossess your home due to non-payment. Foreclosure laws vary from one state to the next.  Anything I am writing about is with regard to Illinois.  In Illinois the foreclosure process can take about 9 months, start to finish.  In some cases it can go much faster, or slower, depends on the situation.   The homeowner has several opportunities during the process to turn thing around - but don't wait until the last minute to try to do that - contact a lawyer as soon as possible if you have been notified by your lender that you are in default.  I will write more about foreclosures and the process in another post. 

Deficiency Balance - This term describes the difference between the amount of money that the home owner owes to the bank and the amount of money that the bank will receive at the short sale.

Short sales and forgiveness of debt

Just because someone's home is worth less now than when they purchased it, doesn't mean that they can just sell it with a short sell and walk away with no obligations.  The bank(s) won't let people off quite that easily.  Home sellers have to PROVE that they do not have the means to make up the deficiency balance.  The banks can and do expect sellers to come to the closing table with a check to make up the short fall.   If the seller does not have the funds to do that, then they have to prepare a short sale package for the lender. Usually there is a form to fill out, and plenty of supporting documentation, including pay stubs, financial statements, credit reports, etc.  And the seller usually has to write a "hardship" letter - this is a letter that describes why you can't come to closing with a check for the deficiency balance.

Typically if there is one bank involved (no home equity line, or the home equity line is same bank as primary mortgage) and they approve the short sale, then they will also forgive the deficient balance.  However, this deficient balance is reported to the government as income.  In the past people had to pay income taxes on this income - right now there is law in place that waives the requirement to pay income taxes on forgiven balances...but I believe this is a temporary situation through the end of 2009.

If there is a separate bank involved with a home equity line on the property, things get a little more complicated. I will write about that in my next post.  Also, coming in a future posts - what you should know about buying a property with a short sale.

Thanks for reading!!  If you have questions, feel free to post a comment or contact me directly.

nsk

To view all homes for sale in the Chicago area click here.

SOLD - in less than 7 days!

How did I do it?  Well, the most important thing in this market is price.  We started out with the best house in the area for the price.  Anyone looking at homes in this price range would want to see this house - and they sure did come out to see this North Shore house! 

The house went into the MLS on Thursday April 2nd.  By Sunday there had been over a dozen showings...and we had two offers.  These were decent offers, not crazy low-ball offers.  Showings continued  - since the sellers were out of town, it took a while to contact them about the offers.  By Monday we had a third offer, and the parade of showings continued.  The third offer increased their offer price when they learned that there were two other offers on the table.

We gave all of the buyers an opportunity to  give us their best offer.  One buyer dropped out, one increased their offer, and the one that had already increased their offer stayed with that amount.  The offer selected was over the asking price. 

So, you may be wondering, what is so special about this house?  Not much really.  It is a nice home for a first-time home buyer with three bedrooms and one bath.  This 1950's ranch has a full unfinished basement.  There are no appliances, and the home needs lots of decorating and updating.

Thanks for reading!

nsk

Real Estate Market Stimulus Package

I'm not an economist, and I don't play one on TV.  However, as a Realtor, I do have an opinion on what it will take to get all of the excess inventory sold everywhere.

The $8,000 tax credit

I applaud the $8,000 tax credit for new home buyers in the Federal stimulus package - however I don't think that this is going to do much in the short term.  If someone that is considering buying a home right now, they won't see that $8,000 tax credit until they file their 2009 income taxes next year.  That is a long way off, especially for first time buyers that could probably use the extra money for a down payment NOW.  In fact, I don't think that this tax credit will have an impact until Q4 of this year.

Subsidized interest rates

I'd like to see the banks use the money they've received from the government (or that they are going to receive) to subsidize mortgage rates for ANYONE buying a home.  A great incentive that would motivate buyers immediately would be a 4% interest rate. This type of program would help shrink the huge inventory of homes for sale - including the homes that are short sales, pre-foreclosures and bank-owned (foreclosed) properties.  Of course this rate would only be for qualified buyers.

Additionally, people meeting certain requirements that need assistance keeping their current home should also get access to this type of rate.  Unfortunately, someone that has purchased a home that is way beyond their means should just get out of that home and move on to something that is more realistic for their situation. 

Help for unemployed

Maybe banks could offer temporary relief for those that are recently unemployed (again meeting some specific criteria) to help them out temporarily until they get work.  I know so many people that have lost their jobs or have had dramatic pay cuts in recent weeks.  They shouldn't have to lose their homes due to these temporary situations.  This would prevent their homes going up for sale and adding to an already glutted market.

Short sale guidelines/subsidies 

A huge bottle neck with the excess inventory is short sale properties.  I've written a lot about short sales already, but here is my $.02 on what needs to happen to get rid of this inventory quickly,  The sooner these homes are off the market, the sooner the market will stabilize.

• The government needs to provide financial incentives for banks to shorten their short sale approval process from the current 12 - 16 weeks, to something more realistic like 2-4 weeks.  Buyers have no patience to wait 3 or 4 months to find out if the bank is going to accept their offer.  By the time that happens, many buyers have moved on to something else.

• Create subsidies or some other financial incentive for banks to approve more of these contracts (or maybe use some of the $ that they've received, or will recieve, for this purpose). Buyers right now are looking for great deals, and many short sales could satisfy that desire.  However, in addition to taking too long to approve these deals, they won't even approve some reasonable deals. And each bank has different criteria on what what is an acceptable deal.

• Create uniform guidelines for banks to follow for these deals.  If they follow the guidelines (which would be structured so that more of these deals are approved) then the bank qualifies for some some of the bail-out money, or a tax break, or something like that.

I  talked to one bank that said that they already "wrote off" the home equity line (in other words they've already assumed the loss on their books) on a home that is going through the short sale process, and yet they were still holding out for a larger amount of $ to release their lien on the property.  I understand that they are trying to minimize their losses, but if a home goes through foreclosure and/or the sellers declare bankruptcy, they bank won't get any money at all. So why not agree to release the lien and collect some $ from a buyer that is offering CASH to purchase the home NOW?  This way we can put someone into the home that can afford it and the home won't go into further disrepair (the current owner can't even afford to maintain it).

Loan restructuring

Let's say someone is having temporary financial issues and they know that in a month or two it will be difficult or impossible to make their mortgage payment.  If they call their lender/bank today to try to renegotiate their loan or ask if they can get some temporary relief (e.g. skip a payment or make partial or interest only payment with no penalty), the bank will tell them that there is nothing they can do unless the homeowner is already in default.  In other words they won't talk to you until you've already screwed up your credit score and missed a few mortgage payments. 

There needs to be some way for homeowners to negotiate with the banks BEFORE they are in default.  I realize that there is risk that some people would take advantage of this - there must be a way to do this to help some of the hard-working people that have been affected by the economic downturn.  These people have been playing by the rules, paying their mortgages and their other bills, and now the rug has been pulled out from under them.  A job that was secure only a couple of months ago is gone - or a self-employed person has seen their business drop by 60 - 70% within a few short months. These people need a little time to get their footing back, to find temporary employment or find a new job. (Hey, how do they apply for one of the new jobs that is being created with the stimulus money - give 'em a shovel?)

That's my thoughts for now.  Would love to hear your comments.

Thanks for reading.

nsk

Kiplinger Forecast for 2009

Toward the end of 2008, Jon Frandsen wrote an article at Kiplinger.com titled  "12 Things to Look Forward to in 2009."

Here is my favorite part:

2009 Will Be a Great Time to Buy or Refinance a Home. The median home price nationally has fallen 20% since the housing market’s peak in July 2006, according to the National Association of Realtors. That’s especially good news for first-time home buyers or anyone who doesn’t have to sell a home before they buy, as well as patient buyers who can handle the time consuming process of buying a distressed property. In mid-December, the 30-year fixed rate fell to 5.17%, according to Freddie Mac. Mortgage money hasn’t been this cheap in nearly 40 years. Buyers who are having trouble coming up with a 10% to 20% down payment or who have dings in their credit record may be able to get Federal Housing Administration financing with as little as 3.5% down. And there may be help for people already in their homes.

Borrowers facing a reset on adjustable mortgages may get relief, since key indexes have dropped. And for those teetering near foreclosure, the Obama administration and new Congress will help more distressed homeowners keep their homes.

You can read the entire article by clicking here:  12 Things to Look Forward to in 2009

My thoughts (a month after the above article was written):

• The new administration and the new Congress will only be able to help a limited number of people that are facing foreclosure.  If you don't have a job or some type of income, there is little that they can do for you.  If you do have some income, and your payments got too high due to an ARM adjustment, you may be able to get some relief.
• Buying a distressed property (short sale, pre-foreclosure, or foreclosure) takes more than time.  It takes patience, and nerves of steel.  I'm working on a couple of these deals and they are not for the average buyer.
• Refinancing sounds like a great idea when you hear the current interest rates....unfortunately, my mortgage resources tell me that many of the re-fi deals are falling through because properties aren't appraising high enough, or the borrowers aren't qualifying.  Doesn't mean that you shouldn't try refinancing, but beware, it may not work.

Thank you for reading.  Your comments are always welcome!

See all homes for sale in the Chicago area

The 2009 Real Estate Market

To search all Chicago area homes for sale, click here.

Expert opinions on how the residential real estate market will fare in 2009 are mixed.  After reading and listening to many different views, here is my take on things.

First, here are some basic pieces of info that will affect the market in the coming months:

• For the past 2 years, more homes have been coming onto the market for sale each week than have been selling. This has created a large inventory of homes for sale.  That is why prices have been coming down, it is basic economics.  When supply exceeds demand, prices go down.
• The market of 2 - 3 years ago is gone.  People (especially sellers) need to forget about those prices because we aren't going to see them in the near term (certainly not in 2009).
• Easy credit allowed people to spend more and more on housing, while actual income levels did not necessarily increase at the same dizzying rates. The market is adjusting so that the cost of housing will be more in line with people's income.
• Incredibly LOW interest rates are available (around 5% as of this writing) to buyers with good credit scores and a 5 - 10% down payment. 
• In hindsight we know that the credit debacle was the first domino to fall in the financial industry...and now it's confirmed that we're in a recession.

The various experts seem to be in agreement that there will be a "bottom" to the residential real estate market in 2009 - however there is not any consensus on exactly when that will be.  I am hoping that the low interest rates and the low prices will spur demand among people that have been sitting on the side lines waiting for the right time to make a purchase. Until that happens, prices can and will continue to fall.  When it does happen, I do NOT expect prices to start climbing back up to the levels we saw a couple of years ago.  The are going to stay in the same ball park as they are now until the excess inventory is sold.  And that is going to take more than a year. 

The key to getting your home sold in 2009 will be to stay ahead of the market.  Your home needs to be seen as the best value compared to any other home in the price range in your area. I saw homes sell in 2008 in less than 30 days, some in only 2 weeks - and they key was the price versus the competition.

Best wishes for a very happy new year!! 

As always your comments are welcome.

Thanks for reading.

nsk