If I read one more article on the depressed housing market I'm going to overdose on Zoloft in an abandoned builders model home and wait for the repo guys to find me and call 911.  Enough of the housing market news already.  There's lots more going on than meets the eye here.  Some huge dangers but some equally huge opportunities.  Here's what I mean:

1. THERE ARE TOO MANY HOUSES FOR SALE- No kidding.  Really?  Not so fast here.  Except for some truly overbuilt markets we have about a 9-12 month supply of housing inventory versus the normal 6 months.  It's the same situation that car dealers face in each new model year. About August the new models come out.  The old ones are still on the lots.  Too many cars and not enough space.  Some get discounted.  All eventually get sold.  The extreme markets like California, Nevada, Arizona, and Florida are overbuilt.  It wasn't an accident.  It has nothing to do with the viability of real estate there.  It has everything to do with oversupply and financing terms. Even the markets are realizing this in rewarding the stock of national homebuilders as they rearrange their balance sheets to accomodate for this.

2. THERE IS HUGE OPPORTUNITY HERE- In any market excess or bubble there are people who get caught and people who get away.  The bad news is that there's too much housing available.  The good news is that it's never been cheaper.  Real estate is on sale in this country right now and everyone in Europe knows it.  When you put the Euro against the dollar and almost every other currency at this writing, US Real Estate when factored in with the currency difference plus the discount in market value is perhaps the best buy in the world.  Putin may be creating a new Russia but I still wouldn't bet on home ownership there.  Forget about historical norms and other statistical measurements when you are looking at this.  There are no more ocean front lots in Florida, California, or North Carolina.  There are fewer view lots in Santa Fe than 5 years ago.  No one is tearing down houses in the Hamptons and putting up soccer fields.

3. SOME PEOPLE WILL LOSE THEIR HOMES-  Some good people will lose their homes and some bad people will lose their homes.  The good people need to band together and sue the banks that loaned them the money that they didn't understand everything about. Mortgage lenders and Wall Street need to make restitution here with the people they misled. The bad people need to understand that speculation has it's risks.  Too many speculators went to ""Nothing Down" courses in hotel meeting rooms instead of "Real Estate Finance 101" at the local community college.  Buying to-be-built condos in the hope that you can flip them before closing without understanding all of what's being built is like buying wheat futures without knowing the weather forecast..

4. RETIREMENT HOMES HAVE NEVER BEEN CHEAPER- If my parents were still alive and wanted to live on either coast of Florida I could get an all expense paid three day home tour by just calling a national home builder up and saying I was a qualified buyer.  I was in Ft. Myers last Fall and three major builders were running full page 30-50% off sales.  Brilliant strategy except that they should've been running the ads in The Toronto Star and The Times of London.  Zip on down to Florida now, make a lowball offer coupled with a request to throw in a plasma tv and wet bar, and then watch your house triple over the next 15 years.  Miami will have about 80,000 condos on sale this year for those of you who like the 15th floor and a view of South Beach.

5. CREDIT IS TIGHT BUT WILL LOOSEN UP- Banks are like street corner hookers looking for johns. Banks make money not by taking in deposits but by making loans.  Sooner or later like the hookers, a transaction has to take place.  More money or less money but a transaction none the less.  Banks are in this fix because once again they forgot that builders will build as long as you give them money.  It's what they do.  Banks are the poster child for credit bulimia...binge...purge..binge...purge...binge...purge.  They are also the first ones to cry when their hair starts falling out.

6. NOT ALL MARKETS ARE AFFECTED THE SAME- I have a great Realtor friend in Wichita, Kansas, Cindy Carnahan who makes an excellent point:  Wichita never had a boom so it doesn't have a slump.  Places like California, Nevada, Arizona, and Florida all of which have pretty equal amounts of sunshine and bullshit have peddled both of them to drive the previous home sales and create the current depression.  North Carolina's mountains are still selling.  The Hampton's are selling. The Gold Coast of Chicago is selling.  If you think real estate is depressed try to buy one of the condos in the Bloomingdale's building in Chicago.  The new Toronto Four Seasons sold 100-3 million dollar condos and they won't be built for 5 years.  Just ask Hunter Milbourne of Southeby's Canada.  Even Panama and Costa Rica are selling.  Stop looking at LA as the financial, cultural, and political capital of the world.  It's just where the Oscars are held.

7. THE CREDIT SCORING SYSTEMS ARE A SCAM- FICO, the three credit reporting agencies, and all the algorithms within them did nothing to prevent excesses from taking place.  The credit rating agencies measure what you didn't do and not what you  have always done.  A 20 year history of buying groceries, making mortgage payments, car payments, and paying off student loans can be erased by a divorce, medical emergency or a mail delayed payment.  Make your friends and family your new lenders.  They need the money and the rates are cheaper than the mob and the humiliation when you apply is less than the banks.  Here's a non technical analysis of a potential buyer that anyone should be able to perform:  Do you have a job or a business that pays you regularly and do you spend more or less than you make each month?

8. MORTGAGE BROKERS AND REALTORS ARE LOSING THEIR JOBS- Being a mortgage broker and getting your real estate license are respectable alternatives to multi-level marketing for many folks in search of extra money..  Everyone in need of part time income or what they believe to be quick money starts selling mortgages or real estate in booming markets.  The truth is we had to many lenders and we have too many Realtors.  Amateur hour is over in both those professions.  It's good for the business and good for the consumer.  Realtors need to take their game to something higher than pointing out that there is a kitchen and a big back yard anyway.

Real estate has never been cheaper in the US.  It has never been more available in the US.  It has never been more accessible by the rest of the world than right now.  Roughly 30% of the potential buyers in the world for US Real Estate will come from Europe and the Middle East over the next ten years.  Serious money buys real estate and stocks in the US and keeps it's mattress money in Switzerland.

The real problem with US real estate right now is not that there's too much of it.  It's that we don't own enough of it.