peterb- I’m interested to know why you’re thinking that the Govt’s newly announced plan doesn’t stop the drop and push prices sideways. Is it simply a lack of faith that the Gov’t can do anything right? I share this sentiment in the long term, but I wonder: if they succeed in stemming foreclosures through payment reductions (be it interest rate or principal reductions) and moratoriums, won’t that indeed cause a leveling of prices, near term?

(You may recall I decided to sell my house a few months ago before I got into a negative equity situation and I appreciated your comments then. I’m hoping the fact that I’m now debt-free with a solid job is a better position to be in then counting on the aforementioned Gov’t homeowner rescue. )