Whether prices have surpassed the price drop or not, individuals are certainly feeling the pain.
Stevens has been trying for the last two years to work out a short sale agreement with the help of American Homeowner Preservation (AHP), but the bank won't agree to the terms. Stevens faced financial difficulties following a divorce, loss of parent and other medical issues.
The bank did agree to a short sale of $43,000 less $8,950 for repairs plus other closing costs and back taxes or a net price of just $28,883, but it refuses to agree to a key part of AHP's program, according to Jorge Newbery, Director of AHP. AHP finds an investor to buy the home and signs a lease with option to buy with the homeowner.
In Stevens's case the bank will not sign a waiver to allow the Ohio policeman to stay in his home. Newbery says the bank will actually net less money than the $28,883 because it will now face additional charges to evict Stevens plus once Stevens is out the bank will have to pay to secure the property and still likely face theft and vandalism.
The home went to a sheriff's auction on Friday, January 7 and there were no takers. So the bank got the home. A confirmation hearing is scheduled within two weeks and Stevens could be evicted within five weeks. AHP is still Find Local Homes for Sale Browse through photos of millions of home listings on AOL Real Estate See Homes for Sale Search Foreclosures for Sale working with Stevens and hoping to save his home with legal help. There are some legal questions regarding chain of title that could enable AHP to negotiate a settlement and help Stevens keep his home of 14 years where he lives with his two daughters and granddaughter.
Do other experts agree that the housing crisis has reached Great Depression proportions? For economist Robert Shiller, it's old news. He said that would happen back in 2008, but others think the housing markets are too different to make an apples to apples comparison.
While Shiller thinks we're experiencing a downturn as bad as the Great Depression, Brian Coester, CEO of the Coester Appraisal Group, says it's not an easy comparison. "The government didn't start keeping track of home values until the 1950s, so it's hard to say whether or not depreciation is similar." His estimate is that home prices were in the average range of $8,000 to $11,000 (he can't be sure).
Coester also points out that home financing was much different in the 1920s and 1930s. People had mortgages for just four or five years. Only adjustable interest rates were available and most mortgages were interest only with a balloon payment. The 30-year fixed-rate mortgage was not available during the Great Depression. That was created by the Federal Housing Administration after the Depression.
One solution that was available to fill all the vacant homes after the Great Depression may not be used today. The vacant homes were given to troops returning from World War II in order to help stabilize the housing market. Instead banks are refusing to work with creative programs like AHP's to try to keep homes occupied even by civil servants who serve the public like Fred Stevens.
Jonathan Miller, an analyst for the MRIS/RBI thinks the numbers for the real estate market this year show "artificial highs" and "artificial lows," primarily because of the ups and downs of the market in 2009 and 2010 caused by the tax credits. People were pushed to purchase homes to meet the tax credit deadlines earlier than they might have done so. So prices started to jump up as the demand increased and then drop again as the demand slacked off. He thinks we'll see a more normal pattern in 2011 without the artificial stimulus of tax credits.
He insists "there is no national housing market" and thinks any attempt to correlate today's market with that of the Great Depression can't be done. Real estate is local. Some markets, like the metro DC market, are going up, while others are still falling.
Lita Epstein has written more than 25 books including The 250 Questions Everyone Should Ask About Buying Foreclosures and The Complete Idiot's Guide to Personal Bankruptcy.
For more on mortgages and related topics see these AOL Real Estate guides: