Another lender went bust today. This will continue for some time as we are just getting started with the pain in the housing market. If you are a long term holder of real estate, this is just a bump in the night, but if you are in the business or looking to sell in the next few years, seriously consider having a solid plan B available.

This isn’t the end, just the beginning.

Prices aren’t controlled by realtors, appraisers, nor governments. Prices, in housing, aren’t controlled at all really. But to say that there are no factors that influence them isn’t correct, just the word “control” would, by most, be considered incorrect.

Houses are sold by one party and bought by another based on a negotiation and prices are basically based on supply and demand. Realtors, et. al., have a role in the negotiation, but they can’t overcome supply and demand, which is influenced by factors such as unemployment, interest rates, and market psychology. The prices are set by whatever the two parties agree on, it’s to the factors that effect that negotiation we should look to see hints of price changes.

Everyone is betting on home prices falling and so there is really no cheap way to hedge your house. The last time I looked the forward prices a year out were 30% or so lower than current. So what good is hedging a future price that is already down 30%. Might as well sell at today’s spot price, yes?

Maybe next housing boom, but not this one.