Negative equity is increasing in American Households, which has and will continue to affect consumer spending. Another concern is a further increase in distressed properties that will lead to more declines in pricing.

Quoted: "First American CoreLogic, which estimates the numbers many media outlets use, has changed its methodology from the last survey. It now no longer assumes that home equity lines of credit have been completely drawn down (fair), and it credits payments that mortgagors have made to pay down their principal (duh). The net result is that the housing situation looks better than it did a few months ago. Still bad, but better."

Quoted: Sold on its square footage -- Quadrant advertisements run during the housing boom presented a family lost in its living room -- the house lacked a heater powerful enough to warm all that space, Sigafoos said. Sections of the home had been left without insulation by crews working for the Weyerhaeuser Co.-owned developer, he claimed, and wet materials used during the house's rushed construction provided a foothold for mold.

Quoted: According to RealtyTrac, an online foreclosure database, 6,495 properties entered some stage of foreclosure in the Seattle-Tacoma-Bellevue region in the third quarter of this year. That translates into a 38 percent increase from a year ago, putting the region 95th out of 203 metro areas that RealtyTrac gauges.

Lending professionals are continuously trying to predict trends. This past summer, the belief was that rates were definitely headed to 6%+ territory. Now, we've actually reversed the trend and gone lower.

Word is that the Fed will keep rates low until the end of spring 10, which should, theoretically, bolster monetary supply and allow banks to continuet to transact in commercial and residential lending. Since there's an extension of the home buyer credits, rates probably won't stray too far from the 5-6% range for the near-term.

The FHA helps homebuyers who often cannot qualify for a loan otherwise. The problem is that there is usually a very good reason for why a potential buyer doesn't qualify for a conventional loan - poor/limited credit history is one, lack of funds is another. The result is that the FHA lends money to a pool of higher-risk borrowers (that is, a higher chance of default). It's no surprise, then, that as of this past summer, about 17% of FHA borrowers were behind on at least 1 payment.

I don't see anyway around a bailout of the FHA by taxpayers within the next few years.

Quoted: The Federal Housing Administration says its financial cushion has dipped to a dangerously low level but should remain above zero under "most economic scenarios." The agency, a major source of funds for first-time homebuyers, faces mounting concerns that it will eventually need a taxpayer bailout as losses grow from homeowners who lose their jobs and can't pay their mortgages.

Quoted: The $8,000 first-time home buyer tax credit, which helped home sales rebound this year, was scheduled to expire Nov. 30. The legislation extends it to homes that are under contract by April 30, 2010, and creates a new $6,500 tax credit for owners of existing homes who buy a new principal residence. To take advantage of this credit, buyers must have lived in their old house for at least five of the past eight years.

Quoted: Pending sales of single-family homes and condominiums in King County jumped more than 70 percent in October compared with last year as buyers raced to purchase homes before losing a federal tax credit.

The drop in prices in the area has definitely slowed. In some areas, we're even seeing prices increase a bit (even among new construction). We hope these are signs that the market is trying to get itself back on solid ground.

Quoted: However, Seattle home prices were relatively unchanged month-to-month between June and August of this year. The Seattle index dipped 0.1 percent between June and July, only to increase 0.1 percent between July and August, S&P data show. “Broadly speaking, the rate of annual decline

Of the many housing price indices used, the S&P/Case-Shiller is probably the most popular. Let's hope the improved housing numbers last through the winter.

Quoted: WWhile down from last year’s level, August marks the seventh month of year-over-year improvements for the indices, which track the price path of typical single-family homes located in major metropolitan areas. In 19 of the 20 metropolitan areas, Cleveland being the only exception, price decline improved in August from July. “Broadly speaking, the rate of annual decline in home price values continues to improve,” said David Blitzer, chairman of the S&P index committee. “We see this general trend whether you look at the as-reported data or the seasonally adjusted figures.”