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     Here's the operative sentence in a Washington Post story this morning:

"the expectations of buyers and sellers are out of whack"

     Clearly something is out of wack. Home sales across the county are strangled...down 28% in Montgomery in July, for example. There's a big backup of homes on the market...a year's worth and growing claims the Post piece.

     So even if there is a sudden improvement in the unemployment rate, and people suddenly start buying and selling again, it will more than 12 months before the supply and demand shelf-life of the real estate market evens out a bit.

     Homeowners enjoyed seeing their homes increase in value...a true investment in "The American Dream" the Realtors told us. In reality, as our own homes increased in value, so did the homes we would theoretically buy to replace them when we moved. Sell for more, buy for more. Then, of course, the musical chairs stopped and the foreclosure signs sprouted up like crocus.

     Now homeowners who want to sell have a tough row to hoe...and since they are also the buyers, we're in a quandary.

    About the only people enjoying and profiting from all of this (other than foreclosure attorneys) are first time buyers with some cash to put down. Fifteen year fixed rate mortgages were at 3.83% last week, down from 3.86% the previous week and 4.54% a year ago. 3.83%!

    An historic low interest rate. Supply and demand at work. Few buyers and borrowers, so down go the prices of the homes and the cost of the money to buy 'em. And still the market is moribund,

    A column in the NY Times today suggests that the choice may be to save today's homeowners or tomorrow's...i.e., let the real estate market collapse without government intervention, if necessary, in order to create a fair buying and selling field for the future. Ouch.