Both types of buyers have now suffered substantial losses to their retirement accounts. Both have suffered substantial losses of their primary home equity and to make matters worse lenders have moved away from lending to foreigners without substantial down-payments of 40-50%.

Thus, it is crucial for all sellers through the help of their Realtors as well as other industry experts to set the expectations to the realities of our times. Prices must continue to drop to allow those buyers up north and from abroad who buy in masses at $150-$350k to come back to the market. For those wealthier individuals the trend to buy the premiere properties will continue but in fewer numbers as the ranks of the wealthy also continue to be depleted.

Sellers must recognize that their attempt to recoup their investment is no longer sustainable in a spiraling market. Sellers will need to do everything possible to decrease their obligations and get out from under their upside down properties. For those who can wait, it’s a different story. But for those who continue to believe that they will get a buyer willing to pay what they paid from 2001-2006 is wishful thinking.

The latest market crash has changed the landscape enormously and people will no longer be willing to plunk down more than they can afford. Conservative buyers will make a tough market even tougher by waiting for prices to align with the new standards set by market changes.

The sooner the market reacts to this new era of conservative spending, the quicker our real estate markets will return to an order of normalcy. Sellers who truly want to sell no longer have the option or luxury of recouping lost equity. A sad situation for many, but without a reality check, the entire market is affected.

Just my humble opinion.

I suggest the following be included in the buyout package: for the next six months, on any privately offered house purchased, the buyer would be able to double his/her mortgage deduction for the next five years. Additionally, the seller would receive a tax credit on the amount proven to be a loss including the cost of sale. Limit the program to homesteads and limit the deductions to median home values in the particular market. So a home purchased in Los Angeles would have a higher deduction possibility then a home in Fort Wayne. If the sellers knew that buyers were on the market again for a short six month period; prices might drop to sell the home and buyers might get some sense of urgency to start looking. If this part is not included these foreclosed homes will so overshadow the free market houses that the free market homes will become the problem very soon!
This is not a bailout; it is not a cheesy rebate check. It does not help the speculative housing market. It does not provide help to the stupid sub-prime lenders who were giving away money. It would cost the government nothing because now with nothing happening there are no tax revenues! All it does is help the common person buy or sell a home.

Perhaps a creative realty firm could fashion something similar without government input?

“After being overvalued by as much as 40.4 % in the 1st Quarter of 2006, Sarasota-Manatee is now listed as being undervalued by -4.8% for the 1st Quarter of 2008.”

As many investors in the U.S. financial sector can attest to over the last 2-3 years, ‘undervalued’ can become much MORE undervalued; sometimes by a large amount. Just ask shareholders in Bear Stearns, Lehman Brothers, Citigroup, KeyBank, FanniMae, FreddieMac, Washington Mutual, etc …

Real estate transactions in SRQ may be up; but prices have still further to fall. Until deficit spending comes to a halt – both on a personal and governmental level, real estate prices will continue to fall.

We’re a considerable distance from that realization in this country. But we’re getting closer every day, which is a positive development.

Just one person’s opinion.