Why is Anyone Surprised?

Implications: We are Reaching a Point Where Public Corporations cannot hide from the market facts--we are also just at a midpoint in the overall RE crisis, and there is more writeoff to come. With 2.3M vacant homes in the U.S., we will continue to see downword price pressures until this number returns to well under 1M.  If new construction and foreclosures add to the inventory, we will see price reductions of 30-40% in the next two years.

Analysis: Writedowns will continue, not only by builders, but by lenders and funds that are involved in RE lending.  Projects will continue to be delayed and shelved.  The government cannot come up with a bipartisan solution to the problem, so more foreclosures loom in the near future, both in residential and commercial.  When large projects go under in the near future, we will be revisiting the crisis all over again.  We haven't yet seen the impact of destination resorts, and golf communities that are partially built out, but are sputtering.  More is coming.