Poor homeowners have seen their home values drop from 24% to 35% since the high market values in 2005.  But, we've had a few indicators In the Toledo area that the real estate market may have hit bottom and be starting to improve.   More homes sold in August and September this year than did in those months in 2008.  And substantially fewer were on the market in August and September this year than last year.  The average sold price of homes in the Toledo area also increased by $2,000 to $108,000 in September from $106,000 in August.  A number of local and national factors have impacted this trend...

• Most of the sub prime foreclosed homes have been worked through the market and those were often lower priced homes to begin with.  The homes largely being foreclosed on now have had conforming loans (the kind that Fannie Mae and Freddie Mac will back and buy up) which should increase the average sale price.
• The President's Making Homes Affordable Loan Modification Program has kept many families in their homes by encouraging mortgage holders to rework loan terms for people in default and at risk of foreclosure.
• The First Time Buyer's Tax Credit has helped locally to reduce the number of homes for sale.

The Federal Reserve plans to keep interest rates low and to buy up mortgage backed securities to support the housing market until the real estate market starts to improve on a national scale.  When the Federal Reserve starts to loosen on these efforts, it is likely that interest rates will begin to climb.  If this happens, more people will decide now in time to buy and maybe more sellers will feel it is time to put their homes on the market.  I think we're still in for a slow return to healthy market values.