No Housing Bottom Yet

Editor's note: As a special feature for April, TheStreet.com offers a 20-part series on virtually everything about real estate. This installment is part 20.

I know -- you're about as sick of hearing about the housing market as you are of Rosie O'Donnell and her recent antics.

But while your life will go on just fine if you ignore the Rosie noise, you may be personally affected by the housing market's behavior, so listen up.

The housing market has not hit its bottom yet and probably won't until some time in 2008.

Yep, I said it.

I can feel the email coming already. Look, I don't like to be doom-and-gloom. I'm Marcia Brady -- the glass is always half full in my world, but there are too many reasons to believe that we still have a way to fall.

The Inconvenient Truth

To start, we're completely overextended. According to data gathered by the Federal Deposit Insurance Corporation (FDIC) from the end of 2001 to the end of 2006:

• Loans secured by real estate are up 76% to $4.51 trillion.
• Residential mortgages for one- to four-family homes jumped 57.7% to $2.18 trillion.
• Commercial real estate loans rose 58.8% to $904 billion.
• Home equity loans are up 203.4% to $559 billion.

So it should come as no surprise that foreclosures are up, too. National foreclosure filings were up 47% last month from a year ago to 149,150, according to RealtyTrac, an online marketplace for foreclosed properties. That's one foreclosure for every 775 households.

Sure, you can blame the subprime market for some of it. Those loans seem to be defaulting every minute. Moody's (MCO Quote) projected that average losses on pools of subprime mortgages from 2006 would be as much as 8% -- that's one-third higher than what they expected just six weeks earlier.