One thing to wait for is the outcome of the senate bill called, The Foreclosure Prevention Act of 2008. A component of the bill will allow businesses to carry back NOLs (Net Operating Losses) five years instead of the normal 2 years.

The focus of course would be how new home builders would use this new tax incentive in 2008 and 2009? Builders had made such treamendous profits going back as far as 2004 that it is possible for them to “dump” their inventory in 2008 and 2009 just to shave their tax bills from previous years.

This could result in futher plummeting prices for new homes in SD and other areas. That would lead to a lower floor for the home values and more homeowners more upside down.

Hopefully the other component of the bill that gives a tax incentive to homebuyers of $7K to $15K in tax rebates over 2 years for buying an REO, will balance out the fire saling of inventory by the builders. Banks may stick to their prices on REO’s knowing that there are buyers close at hand and the builders won’t have to compete as much.

????????????