It depends. In general, buyers are finding it increasingly more difficult to obtain conventional financing; however, this doesn't have to be a deal-breaker. (Check out 'creative financing' for more info.) In some markets, where there's a high number of (pre-)foreclosures/REOs, the property values continue to decline. Yet, in other markets, like in Dallas/Ft Worth, there appears to be no correlation between the property values and the performance of the economy overall; the property values in DFW have only declined about 3% thus far. Recently, lenders have become increasingly more flexible with allowing their borrowers to renegotiate the terms (including interest rate, principal [sometimes], amortization period, etc) of their mortgages. Appraisers have grown increasingly more skittish and extremely conservative on their appraisals.