And the Verdict Is....

that the sky is not, in fact, falling. It turns out that the actual damage in the subprime market is being done by loans made only from 2004-2006, and that there are only a small percentage of those loans that are going bad, and that the total percentage of foreclosures in the subprime market is actually smaller than it was in 2000-2001 during the stock market crash.

The Fed, for its part, is not going to sit on its hands, and everyone expects a quarter-point cut at the Fed meeting later this month. That's probably not enough, but remember, it's not the effect of the move that will matter, but the effect of the interpretation of the move to mean that the Fed will not sit idly by and watch this be the worst Christmas season in the history of money.

This, in turn, has calmed things down across the markets and though many subprime lenders are still contracting on their programs, there's no serious degradation of the market any more, and liquidity is starting to come back into the secondary market.

Locally, even more hopeful, there's some sign of buying pressure in the $350-400k market in the Utah area, a price point that has been absolutely dead over the last six months. No, that doesn't mean a return to the blaze of glory of 2005-2006, but it may mean a return to a normal market sooner rather than later. Think March, instead of 2009.

Meanwhile, it also appears that those who have good credit and a real job are realizing that there are still good deals to be had at good rates out there. The competition for properties is much less, with those lacking hard cash ceding the field to those that have it. There are a fair number of those people, and the 30-year loans are still in the low-mid 6% range, and that makes for some good buying opportunities.

Bottom line - things are bad, on a relative scale, but not disastrous. There are beginnings of a return to normalcy, and the potential of the return to a normal market early next year. Things could be much worse.