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The real estate market is an ever-changing entity influenced by many factors. Realistically, the price of homes, especially in the western states, south-west and the east coast of the U.S., has gone out of control. Homes became so costly that the pool of qualified buyers began to shrink. Is it realistic to pay over a million and one half dollars for a three-bedroom, two-bath ranch home? Of course not! Yet, that is precisely the going rate here in the more populated areas of California.

The real estate market became so inflated through greed and market manipulation, that the same participants who helped to cause this abomination, on seeing their chance to profit diminishing, began to look for alternative loan opportunities in order to qualify unqualified buyers. So, let's review:

1. In the 1950's and 60's, nearly every working family could afford to buy a home. Homes sprang up on farm-land across the country. Supply kept the prices in check.

2. Along came the 1970's and home prices began to rise, partially fueled by skyrocketing fuel costs. Inflation ran rampant. The interest rate began to climb making homes too pricey for the average first-time home buyer. There was a pullback in prices, but ultimately, prices rebounded upwards. The same occurred in the 1980's, once again, prices rebounded. There was a smooth ride through the 1990's, but little by little, prices inched upwards.

3. By the 2000's, in some parts of the country, home prices were out-of-control.

This is when the creative lenders began to write loans with little down payment and no qualifying restraints to allow buyers to purchase homes when they could not afford to make the payments. Some used "teaser" rates, after which, the monthly payment would escalate greatly. When these folks couldn't afford their payments, they simply walked away; after all, they had made no down-payment and had no reason to stick around as their own money wasn't invested in the home.

Home prices began to fall. These same borrowers were stuck in homes that were no longer worth what they had paid for them; more reason to walk away. Home prices fell more, homes for sale flooded the market and again, values spiraled downward. In my humble opinion, this is a natural occurrence that forces the artificial value of a home downward to a more reasonable price.

Now, homes that were selling at one million five hundred thousand, might sell for a nice, round million dollars; still silly for a tract home, but, one-third less than two years

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