I look at my home area of St Charles County, MO, and I see a market that is crippled by many things. (I often rant about negative news on real estate, however here I go.) This area is not unlike many other areas across the country.
I see many potential new home buyers that cannot qualify for a mortgage, due to the tighter credit market. HUD has stepped into other areas, however does not seem to want to lend additional help in the FHA program in this area. Mortgage insurance prices are up because of all the REO properties and the losses of mortgage insurers. No break coming here anytime soon.
I see people wanted to sell their home and upgrade or upsize their home. Well they cannot sell their starter home or their starter home lost enough equity that they would like to wait until the market comes back. I suppose they would rather pay a higher price for their upsized/upgraded home in a seller's market.
Some people who wish to buy homes that would require jumbo loans cannot buy them now as the tight credit market has particularly effected the jumbo loan. From top to bottom of this real estate market we have little help.
The residential rental market appears to be strong, perhaps due to younger adults not being able to qualify for their first home.
Suppose the credit market relaxes a little bit and we have more mortgage approvals. Many people right now feel squeezed due to gas and food prices and might not be ready for a purchase in residential real estate at this time.
I guess we need more money in our economy, however I am not sure that will fix everything anytime soon