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Is the housing market going to sink or swim in 2008? The Real Estate Journal provides a roundup of opinions on this vital part of the U.S. economy. Thomas Kostigen of MarketWatch is optimistic. "At the first blush of renewed energy, the real estate market will bounce back," he says. On the other hand, Bankrate writer Steve McLinder advises homeowners to "wait it out."

According to RealtyTrac, foreclosures are increasing in the top 100 metropolitan areas for the third quarter. Stockton, California had the greatest increase foreclosures, 32% rise from the last quarter. Other areas with an increase in foreclosures include Detroit, Riverside-San Bernadino, California , Fort Lauderdale, Las Vegas, Sacramento, Cleveland, Miami, Bakersfield and Oakland. "When foreclosure can?t be avoided, the losses extend beyond the borrower losing a home. The foreclosure process typically costs lenders added legal fees, taxes due until the property is sold and lost equity in a house that must be priced to sell in a falling market. The added inventory of unsold homes further weakens local housing markets, depressing the value of other nearby homes."

Craig Guillot of Bankrate.com thinks "the residential real estate market shows signs that demand is building and home values may start recovering in 2008." With home sellers cutting prices and builders getting rid of excess inventory, bargain hunters may snap up those houses. "While the housing downturn may not be good for the overextended homeowner or mortgage lender left holding the bag, many economists agree that it is healthy to make a transition to a housing market driven on fundamentals instead of speculation. "

The end of 2009, says the Mortgage Bankers Association, according to Realty Times. [Doug Duncan] says that existing home sales for 2007 will be about 5.72 million units for a 12 percent decline from 2006, and that existing home sales will slump 10 percent further before they pick up by five percent in 2009." Meanwhile, the National Association of Home Builders says "While there's no question that the housing downswing continues to be played out in markets across the country, today's numbers show that builders are pulling back on production until sales improve," says Seiders, "This is exactly what our latest builder surveys have told us. We do expect some additional downward movement in housing production going into next year, at which point starts should begin to stabilize as sales turn upward in the second quarter."

According to the Wall Street Journal Online, home builders are offering smaller homes due to the problems in the housing market. "Financing has tightened down so much that many people aren't able to qualify for the larger houses," said Kathryn Boyce, an account executive in Northern California for Boston-based real-estate research firm Hanley Wood Market Intelligence. "Throughout the U.S. people can't afford what they previously did. Floor plans are going to get smaller." Many homebuilders are scaling down the size of their McMansions due to affordability.

Many businesses are affected by the downturn in the housing market. Boat sales are down, and requests for help from United Way are up, according to MSNBC. In Cape Coral, Florida, jobs have been lost, salaries cut, new home permits are slowing down and the unemployment rate is up. These problems are reflected across the country. Consumer spending is down and job growth is slowing.

Lots of foreclosures, that is. "The Inland Empire's combined Riverside and San Bernardino counties reported the fourth highest number of foreclosure filings of any of the nation's 229 largest metro areas in July, behind Atlanta, Los Angeles and Detroit, according to market tracker RealtyTrac." The abandoned and empty homes are a blight in the neighborhoods and are bringing down property values also. In Corona, California, the impact has been great. Flippers and scammers invested in houses using 100% financing programs, creating a party atmosphere and logging many police calls to the formerly quiet neighborhood.

Linda Martin is worried about losing her home. ''I'm hanging on by a thread, not knowing whether I am going to be living in a car in six months,'' said Martin. Adjustable rate loans and Interest only loans may lead to negative amortization, foreclosures and a drag on the United States economy. Home owners often obtain negative amortization loans without really understanding what they involve.

Easy money and easy mortgages have dried up, according to this article from Newsday. For first-time homebuyers, this has severely limited their ability to buy a house. "It will preclude millions from buying homes," said John Robbins, chairman of the Mortgage Bankers Association. Already "the industry is making the most conservative loans that it has in 10 years."

Yes, says the "wannabuyers". Potential buyers are looking at foreclosures, waiting for prices to drop and trying to time the market, which may be risky. "In general, it is very difficult to time the market," said Raphael Bostic, associate director of the University of Southern California's Lusk Center for Real Estate. "The real problem with that is you don't know when the floor is until after it's passed. If the floor is right now, you missed it."

The New York Times discusses "pre-foreclosure", which "which describes people who have missed several mortgage payments, suggesting that there are many people who are having trouble paying their bills." Options to turn around pre-foreclosures include working out deals with lenders and working with foreclosure lawyers and counselors.

Lenders, banks and financial institutions and associations are working to halt the wave of upcoming foreclosures, writes the Christian Science Monitor. Actions include refinancing subprime loans, setting up a counseling hotline to help
homeowners in distress and working with advocates to help with at-risk borrowers.

According to the Washington Post, Fannie Mae plans to "to unveil a campaign today that would allow lenders to refinance certain borrowers' homes, and federal regulators expect to release a statement urging mortgage lenders to help financially troubled borrowers hold onto their homes." Daniel Mudd, Fannie Mae's chief executive, testified before the House Financial Services Committee about the HomeStay campaign. This will allow homeowners to refinance without clearing up unpaid bills, in order to save their homes.

At a recent auction in Detroit, house prices were less than a car. "At least 16 Detroit houses up for sale on Sunday sold for $30,000 or less. A boarded-up bungalow on the city's west side brought $1,300. A four-bedroom house near the original Motown recording studio sold for $7,000." According to RealtyTrac, Detroit leads the nation in new foreclosures. Michigan's jobless rate is also second only to Mississippi.