Has the Market Hit Bottom Yet?

A combination of low interest rates, tax incentives, and declining numbers of foreclosures on the market have driven up home prices in many previously hard-hit areas, but some skeptics insist that this is just the calm before another storm.

"We're entering the phase where the home owner has to earn his way out of this mess," says Mark Hanson, a highly regarded independent real estate and finance sector analyst. "This summer is shaping up as the gateway into the next move down."

Hanson says there will be a “wall of foreclosures” once mortgage servicers are no longer preoccupied by new mortgage-modification guidelines. He blames unemployment for continuing defaults.

"It took 10 years to create this problem," says Hanson. "Do people really believe we can correct it all in 36 months?"

Source: Fortune, Colin Barrr (09/01/2009)