While no one has a crystal ball, I will give you my projection and explain what I am basing that projection on. For some time, I have been referring to data regarding the volume of adjustable rate loans that are scheduled to re-set. As you may know, many people got in trouble by going into mortgage products that they were unfamiliar with -- these loans had re-set provisions which resulted in higher mortgage payments after an initial period of time elapsed (often 3 to 5 years).
In looking at the current data, it indicates that the bulk of the mortgage re-sets will take place by early next year. If you then factor in an additional 6 months or so, for many of the problem loans to work through foreclosure, it is possible that the worst will be seen by the middle or late '09.
At that point, we will still have to be chewing through the existing inventory, but the number of new foreclosures entering the pipeline should be coming to an end. Once the inventory is more in balance, prices could then begin to stage a partial recovery. I do not believe that this will begin, in our market, before 2010. But within several years thereafter, we could once again have a market on a much stronger footing. Best regards, Eric