Are we there yet? Are we there yet?

The title line above is often used in reference to kids on a car trip, but lately it could also apply to sellers who are looking for the bottom of the current slide of home values. We likely aren't there yet. Prices haven't bottomed out quite yet and may not for some time. There are a variety of reasons, but right now the biggest contributor seems to be the overhang of foreclosed houses that banks are starting to unload.

For a while the banks held on to the hope that they could get their money out of these properties. Now they just seem to want out, at whatever price they can get. So, many are dumping houses at 60-70 cents on the dollar, some even less. I've shown a number of foreclosed houses lately that are in fairly good condition, some even brand new, that are selling for $60-80-even 100,000 less than they were on the market for less than a year ago. I'll admit that a number of the foreclosures that I've shown also need about that much work or repairs to them, especially if they've set empty for a year or more. But a number really needed nothing more than a few light fixtures or some touch-up painting.

This avalanche of cheap, foreclosed houses is starting to discourage regular home sellers who don't have the ability to absorb a loss like the banks do. That is having an unintended side effect that may temporarily contribute to a correction in the market. Discouraged regular home sellers who don't have to sell are starting to take their homes back off the market, determined to wait out this mess. If enough sellers do that the current inventory glut will be relieved a little bit. It looks like the current round of ARM resets, where the cheap Adjustable Rate Mortgages of a few years back adjust upward, will go on for the rest of this year and into next. It's those adjustments that are driving many home owners over the brink and into foreclosure. Unless the banks and/or the government do something to provide some relief, we'll likely be feeling this foreclosure issue and its impact on the real estate market well into next year.

So, are we there yet? No. In fact it's hard to even see that we're half way there yet. But, if you have one of those ARM time bombs ticking away in a desk drawer somewhere in your house, get it out and do something about it before it goes off. try working with your lender first. But, if that doesn't work and you can see that you're going to need to get out from under your house, get with your Realtor and get started on a plan to sell the place before the foreclosure process starts.