Sure I can comment on that statement.
The things mentioned are true and they are bad for the market. However it's the same stuff we've been hearing for the past 2 years now. ARM's resetting, and lenders staying away from subprime....Lenders haven't touched "subprime" in years, ARM's have been re-setting for years and will continue to. With the exception of the fact that like broker dave said, all these lenders are actively starting to modify every loan that looks like it could be in risk...turning those ARMS into fixed rates owners can afford.
Will prices keep heading south for the next few months, YES and no. The only two factors you have to look at to see where prices are being pushed are supply (number of homes for sale) and Demand (number of people buying). In the bigger picture, talking about the Orange and Seminole County area's together there are still 10-14K more homes on the market than there would be in a stable market. And there are a bit over 1300 people buying every month, you can do the math from there.
It's my opinion that he past 12 months was probably the worst part of the price drops. Banks were slowly having to foreclose and got more and more cash strapped, dropping their REO homes prices quicker and quicker to raise capital they desperately needed. Bringing the whole market down with them. Now they are getting bailed out, and actively trying to stave off foreclosures they could have avoided, you actually aren't seeing banks accept offer for .60 on the dollar....maybe from peak prices, but those prices are irrelevant anyway, they are looking for as close to TODAY"S price as possible and now have some breathing room to wait for them. Nonetheless Prices are still being pressured downward due to high inventory. On the smaller picture, locally, there are area's with a very good balance of inventory and demand. Particularly area's that weren't overbuilt during the boom, with great schools, and prices already inline with incomes. Many right here in Orlando, that I don't see further price declines likely at all.
On the bright side, the demand part of the equation is coming back pretty well. Sept of 07 barely 900 homes sold, Sept 08 up to 1300+, Oct 07 - 1090 homes sold, oct 08, even with ALL the news coming out about a bad economy, stock prices PLUMMETING and bailouts Galore, buyers were still up to 1199 sold. There is a pent up demand out there, once something breaks in buyers minds the sales numbers will grow and the inventory will be eaten up quickly. When that happens who knows. What I do know that is a TON of the inventory out there is "bad", bad condition and/or bad location. Those properties will be the last to go.
So if you were looking for a place to call home for the next 5+ years, NOW is the time to buy. Not because you will make a ton of money when the market snaps back (I don't think a "snap" will happen anyway), but because you actually have the choices out there right now, and usually some time to think over the choice, to pick your HOME. Whether it be the perfectly manicured, upgraded, and upkept house you can move right into, or the run down foreclosure at a great price you can put some elbow grease into.....You have choices.
(though on the run down house end, you have even more the luxury of waiting for the one in the best location)
Plus prices in some area's have gotten so low, investors can actually cashflow rental properties they can buy with a decent amount of $ down. Once real investors start picking off the low lying fruit you'll see a solid bottom in prices. And that's already starting to happen. I've read several articles of "vulture funds" coming together to start buying rental properties. People aren't making money in stocks or bonds anymore, some will go back to owning Real Estate.
You may see prices drop another few % over the next 2 years, but in my opinion, from what I see in the market the drops probably won't be big enough to worry about, and won't be so severe you won't make up the appreciation over the next 3-4 years. Just don't buy more than you can afford!
Anyway, that's my biased "Rosed colored glasses" view of things. If Unemployment hits 15% or the banks start failing again, all bets are off. Nothing is 100% a sure thing. Just telling it the way I see it.