Residential Real estate market still struggling

Implications: It is still too early to spot a positive trend.

Affordability is a key ingredient to a turnaround, and affordability will not be reached until prices drop further.

People are backing off spending 50% or more of their family income for housing.

Analysis: As an active, practicing RE broker in the hottest market in the U.S. (Bend, Oregon), I continue to see an environment that causes concern.  In a nearby development, a builder has recently increased advertising greatly, offered major incentives to buyers, and still has a large inventory of unsold houses.  He is considered a mid-range priced builder.  It appears that the top and bottom of the market is doing OK, but the large (75%) portion of the market is still extremely weak.  Builders are now willing to sell their lots off, as well--with very little interest.  The estimate is that 10% of the agents(there are 2,000 in Central Oregon alone), will not renew their MLS(Multiple Listing Service) contract this year alone, so the repercussions of the last several months are, in my mind, escalating into the job market and other areas of the economy.