“”Nationally, one-third of homes are underwater, and 20% of transactions happening across the country are foreclosures,” says Stan Humphries, vice president of data and analytics at Zillow.com, an online aggregator of real estate listings and public sales records. “That’s what drives up the number of home sales for a loss.”

As long as conditions like this exit there will be no recovery. In other words, we need to see prices STOP falling for a few quarters before they can go up.

You can interpret into the statistics all you want but at the end of the day it comes down to affordability.

I hear many predictions but there will be no return to boom times as long as creative financing is not there. The ARMs with teaser rates fueled the boom so look back at pricing preARMs and that’s where the bottom will be…circa 2004.

To think prices will bouce back 15-20% by this time next year is the height of being naive.

If you take a look at July 2007’s figures, there’s always a big bounce. After that, the market will continue on its current trend as both buyers and sellers take themselves off the market.

Is this what people refer to as a “dead cat bounce.”