Can real estate still be fun?

Real estate just isn't fun any more. Or is it?

Remember the good old days when home sales were off the charts? Prices were cut from their kite-strings? Open houses were packed with people -- or even cancelled because the sellers had received multiple better-than-asking offers the first day on the market? Remember when appraisals were higher than sale prices and mortgages were given out like candy on Halloween? Remember when buyers were exuberant, and sellers were ecstatic?

Maybe you remember the housing boom of the early naughts as clearly as you recall this morning's breakfast. But perhaps, now that all the good news has turned sour, the housing boom has started to seem more like a long ago dream than an actual memory.

Today, the harsh realities seem to pile on like linesmen after the quarterback has been sacked. Home sales have slid to new lows. Values have plummeted back to earth, and appraisals come in lower than asking prices. Open houses are deserted, apart from a few distressed neighbors, week after lonely week. Mortgage defaults are up, short sales are back in vogue, and foreclosures are up too. Homeowners are walking away and sending jingle mail. Mortgages are reserved for borrowers who have perfect credit and a fat down payment or hefty equity. Buyers are anxious. Sellers are angry. Legions of I-told-you-so renters are downright gleeful.

And as if those woes weren't enough, lenders have laid off thousands of workers. Brokerages have closed up shop. Realtors have run through their savings, taken part-time jobs or been forced to leave the business. Builders have cut construction crews, slashed new-home prices and even abandoned half-built homes. Jobs have dwindled and an economic recession -- or even, some say, a depression -- may be upon us.

How did it come to this? How bad will it get? Where will it end? And when?

Odds are there will be no government bail-out for homeowners who can't afford their house payments and don't have enough income or equity to refinance. Nor will there be substantial relief for Wall Street investors who've lost their shirts on mortgage-backed securities. Instead, there will be more foreclosures, shuttered businesses, financial losses and economic pain. It will get worse before it gets better, and it won't be over until we make up our minds to let go of it, to let the crises play out, to wipe the slate clean and then, to start anew.

So why not begin the course correction now? If we are destined to become what we envision, it's high time for some new ideas. And if we don't want the future to look exactly like today, we need to shift our focus from the darkness at hand to the brightness beyond. Because just like the housing boom, the bust, too, shall pass.

What's needed now, in addition to more action by the Federal Reserve and the U.S. Treasury, is a new frame of reference: Let's say, a positive spin, if we must.

Yes, 2 million foreclosures would be a rough patch for those who lost their homes and for their lenders and neighbors. But there are 128 million households in the United States, some 35 million of which are renters and an additional 26 million of which own their homes outright, according to U.S. Census Bureau data. Even 2 million foreclosures would represent only 1.5 percent of the nation's total households.

Yes, tens of thousands of Realtors may exit the business. But there were fewer than 1 million Realtors in the country before the housing boom. Today, California alone has more than 200,000, a dramatic oversupply given the low transaction volume. Fewer Realtors will quiet the industry's vicious competition and perhaps result in more stable incomes for those who remain in the business. The current exodus should rebalance the supply of services with the demand and perhaps relieve the downward pressure on commissions as well.

And yes, real estate is cyclical. The deepest, darkest fear in good times is that the fair weather won't last forever. But that same cyclicality is the brightest hope in bad times. Foul weather won't last forever either. What's happening today is a severe and probably long-overdue market correction, but it's not the end of the world.

When all's said and done, people will still buy and sell houses, and they will still need the services of realty brokers and mortgage lenders to do so. Housing markets will stabilize. Businesses will prosper. Innovations, like today's foreclosure bus tours, will flourish. And plenty of people will still be successful in real estate.

Marcie Geffner is a freelance real estate reporter in Los Angeles.

Copyright 2008 Marcie Geffner. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission of the author.

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