I think by now everyone is aware that we are living in an environment of declining home prices. One aspect of that is reduced equity. This is a big problem for people who are in need of refinancing options: people with too much unsecured debt; people who need to finance a big-ticket item; people with resetting ARMs. There were hundreds of billions of dollars worth of equity loans last year, and most of the money those homeowners took out is long since spent. Because consumer spending is about 70% of GDP, a slowdown in these loans could be bad for the economy as a whole.

The other side of this coin is those people who, for whatever reason, are selling their homes. Briefly put, the market is “slow”. How slow? “At the current pace of sales, it would take more than 10 months to clear this backlog, according to the National Association of Realtors.” In Vegas, it’s over twice that. The article is pretty sobering, but the short version is that if you want your house to sell in a matter of weeks rather than months, it boils down to price. As painful as an aggressively low price may be now, you may get even less if you wait for the market to say it’s overpriced.