Readers suggested inventory as a topic. "How about inventories? I have been expecting them to grow, but in Baltimore, inventories are flat or falling in many areas. Not falling by much, but not growing either. Are sellers a bit gun-shy and are going to hold off as long as they can, or are they just holding out until April and May?"

"It’s taking well over 75 days to sell a home in many areas here (on average), so listing now will sell half the homes by the middle of May. Do sellers realize this, and understand it will be even longer if they’re not reasonable on their price?"

"Inventory is MUCH higher now then this time last year (14800 vs 10600, +~40% higher), but is considerably down from it’s Sept 06 peak of almost 18,000. I suppose it’s unrealistic to see the rate of inventory growth we saw last year repeat, but I’m still anticipating surpassing the Sept peak. Of course, I check my zip codes this afternoon and there’s been a nice bump in listings."

Another added, "I’m seeing invetories surprisingly flat here too, in Loudoun Co. It *might* be due to the two recent big winter storms though (not being facecious actually). Now that we’re finally getting into more spring-like weather we’ll see what happens."

"Inventory’s still a little higher than last year at this time, just that it’s starting it’s spring rise a little later than the last couple of years."

One from the northwest. "Inventories haven’t budged here in Portland Or. or in Boise. I track both on a daily basis and it has been basically flat to slightly down over the last month."

One looked at the situation of the sellers, "Look at the alternative channels of distribution — Classifieds, FSBOs, Auction Houses, REO departments, and so on. If under water serfs cannot sell to pay off their mortgage and the realtor commission, they are going to try selling on their own for break-even OR give the home back to the lender OR continue serfing."

One agreed, "Inventory itself is not so significant as must-sell inventory or, at least, really-want-to-sell inventory, consisting of foreclosures, empty houses etc. Both foreclosures and the vacancy rate of houses for sale have increased a lot since last year. On the other hand, some of the inventory last year might have been supplied by sellers who wanted to cash out on the top of the market or simply test the market. We might see less of those this year."

The Rocky Mountain News. "Mortgage broker Jim Spray said it is easy to tally how many bad loans are in the Denver area. 'Just look at the 19,000 foreclosures,' he said."

"On Wednesday, Spray counseled a woman who was about to lose her home because of an ARM that she could no longer afford. 'I did something I have never done in 30 years in the business,' Spray said. 'I put her on the phone with her minister so they could pray.'"

"Ed Jalowsky, a real estate broker who specializes in selling distressed properties, said that 90 percent of these deals had ARMs, many of which are adjusting upward by thousands of dollars."

"'It's too easy to get into these ARMs. They get you in with these low rates, but in a year or two, you can't afford them,' said Jalowsky."

"Real estate broker Carolyn Sandberg specializes in 'short' sales for lenders, in which the lender takes less than the mortgage amount in exchange for the house. When homeowners miss payments, some lenders don't hesitate to play hardball with them, she said."

"Sara Hays, a broker associate in Greenwood Village, works with Sandberg on short sales. 'Every single short sale we have done has been with someone with a bad ARM,' Hays said."

"She said the problem is that when the lender explains that the monthly payment will be low for only two years, buyers aren't listening. 'All they are hearing is that their monthly payment will be $740,' Hays said. 'Two years comes around fast.'"

"Hays believes that buyers should only be using about 30 percent of their gross income on their mortgage. Often, buyers meet that ratio when they get the ARM with teaser rates, but the lender doesn't explain to them that they will be much more financially strapped when the payments rise, she said. 'And some people shouldn't be homeowners,' Hays said."

"People who buy homes with little or no down payment are at the greatest risk of losing their homes, said Lou Barnes, co-owner of Boulder West Financial Services. If home prices had been rising, the loan type would have far less impact, he said."

"'We have had flat to declining prices in the foreclosure belt north and east of Denver,' Barnes said. 'Prices today are basically where they were at Christmas 2000."

"Barnes said other formerly hot real estate markets such as California, Nevada and Florida could be facing the same kind of foreclosure crisis as the Denver area. But it won't happen overnight, he said."

"'One of the best lessons of Colorado for the rest of the country is that our real estate market went flat in 2001, but we did not really start to see the rise in foreclosures until 2003,' Barnes said. 'Since 2003, foreclosures have been compounding 30 percent or 40 percent each year.'"