Home Prices Expected to Fall Even More

Home prices are down 20% nationwide since their peak in July 2006, according to the S&P/Case-Shiller home price index. Economist Nouriel Roubini of New York University, who accurately predicted the housing slide and credit crisis, expects another 20% decline in home prices in the next year. Patrick Newport of economic forecasting firm Global Insight projects a 15% drop.

The damage will likely hit even areas that have so far escaped many problems.

The action plan if you're selling:

• Wait it out

In 2010, real estate should be stronger, with fewer homes clogging the market. So if you can wait until then to sell, do it.

• Make your place shine

In many markets, sellers will face the toughest competition not from fellow homeowners but from banks and builders. Both will be willing to cut prices dramatically to sell a foreclosed or new home.

To convince buyers that your house is worth paying up for, make sure that it's in move-in condition (foreclosures almost certainly won't be). Point out unusual qualities like wide-plank floors or stained glass that cookie-cutter new construction lacks.

• Price it below market

Find out how much nearby homes fetched recently. Once you've figured out what a buyer might pay, price your house 5% below that.

Sound painful? A recent study by a New Jersey appraiser found that houses priced below market ended up selling for more than similar houses listed above market. That's because lower prices attract more buyers.

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How Should Obama Fix the Economy?

How will Obama affect your wallet? And what do you think the new President and Congress needs to do to right the economy - both in the short run and the long term?

We'd love to hear YOUR opinion. Click the comment link below and tell us what you think the President-Elect should do to fix the mess our economy is in. We may just pass your comment on to Congress, or the White House. So go ahead, sound off!

Dollar Store Deals

A dollar certainly doesn't buy what it used to. But it can still fetch you a bargain or two, if you look in the right place. Money Editor Stacy Johnson explains… (video runs 1:33)…

Know of any other ways to save a dollar during these tough times? Share them with our readers by using the "comment" link below. We'd love to hear from you.

Obama's Foreclosure Moratoriam Campaign Promise

Between rising foreclosures and falling home prices, housing issues became a huge concern in the months leading up to the election. As such, they're likely to continue to take priority during President-elect Barack Obama's first term.

"This is really an unprecedented crisis we're in," said Peter Tatian, senior research associate for the Urban Institute, referring to the foreclosure problem and its ripples through Wall Street. "People are still trying to figure out what the size and the nature of the problem is, and how to intervene to solve things."

A full slate of complex housing woes needs to be addressed, from the restructuring of mortgage giants Fannie Mae and Freddie Mac to the modernization of the Real Estate Settlement and Procedures Act, which governs home sales.

But foreclosures are likely the No. 1 concern, because that problem is a big one.

According to a report from Credit Suisse, 6.5 million loans were expected to fall into foreclosure over the next five years. That's based on home prices dropping 10% in 2008 and 5% in 2009, before rising 3% in future years.

The Center for Responsible Lending estimated in August that nearly 2.2 million foreclosures would occur due to defaults on subprime loans from late 2008 through the end of 2009. More than 40 million homes in neighborhoods surrounding those foreclosures would suffer price declines as a result, causing a $352 billion total decline in property values, or an average $8,667 per home.

Federal and mortgage industry efforts are already underway, with various degrees of success, and will continue to evolve before Obama takes office.

On the campaign trail, Obama proposed a three-month moratorium on foreclosures for banks or lenders getting money from the $700 billion federal rescue plan — if the customer is making a good-faith effort to make payments and renegotiate the mortgage.

What do you think, realistically? Will Obama be successful in getting a three-month moratorium on foreclosures passed, or will that promise fall into the "Campaign Rhetoric Garbage Can"? We'd love to hear your opinion. Just click the comment link below and tell us what you think.

Pending Home Sales Fall in September

The Pending Home Sales Index for the month of September fell 4.6% to 89.2 after climbing 7.4% in August, according to the National Association of Realtors (NAR). Still, the index was up 1.6% from a year ago.

The NAR report said the dip in sales was tempered by a sharp decline in prices, which fell 9% year-over-year in September. Also propping up sales to some extent were affordable mortgage interest rates, which dipped below 6% for a 30-year fixed-rate loan during the month, according to Freddie Mac.

One bright spot: NAR reports that the drop in home prices, combined with low interest rates, have brought home buying affordability to 2003 levels.

We're interested in knowing what you think about the current real estate trends, and whether current trends will be affected at all by the recent elections, and if so, how. Use the comment link below to tell us what you think.