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The area that is now known as Hallandale Beach was not even settled until the late 1800's, when Henry Morrison Flagler expanded the Florida East Coast Railway to Palm Beach in 1895. Before then, there wasn't much to Hallandale Beach except swamp and a gray, sandy soil called marl. The Seminole Indians would hunt in the area and gather cootie root, which was used to produce starchy dough.

First Settlement

Flagler recruited Luther Halland, son of a Swedish minister and brother-in-law to one of Flagler's agents, to start a Swedish settlement south of the Danish settlement of Dania. With the assistance of an immigrant named Olaf Zetterlund, Halland began promoting the frost-free subtropical climate and cheap land of Halland (later to be named Hallandale). Halland set up a small trading post in the new community and became its first postmaster.

Farming Community

Settlement was slow, with only a dozen families in town by 1900 – seven Swedish, three English, and two black. The first school was built in 1904 and had only ten students. The first church, Bethlehem Lutheran, was established in 1906. Originally, Hallandale was a farming community, with farmers using the beach only for recreation.

Town of Hallandale Beach

Hallandale officially became a town on May 14, 1927. By that time, there were 1,500 residents, street lights, and electricity in the community. In 1947, Hallandale was reincorporated as a city, and was allowed to annex land to the east. In August of 1999, the city officially changed its name to Hallandale Beach.

How much house can you buy for $1.5 million? Depending on where you look, it might not be very much.

Despite global economic concerns, the credit squeeze, and rising commodity prices, properties in the world's most expensive neighborhoods are still commanding ferocious premiums. While $1.5 million in Cleveland or Tampa would probably purchase a substantial house, with four bedrooms, a multicar garage, and maybe even such amenities as a swimming pool and media room, in London's Belgravia or on Manhattan's Fifth Avenue, it would buy you little more than a glorified shoebox.

Using data from London-based real estate group Knight Frank, BusinessWeek.com identified the 20 most expensive markets in the world and what you can buy in those cities' prime areas with $1.5 million. In London, where at $6,191 the average price per square foot is the highest in the world, your $1.5 million would buy only a small studio in the smartest parts of town. In Venice, on the other hand, despite limited building space, your money goes a bit further, getting you a two-bedroom apartment or more near the Grand Canal. (Of course, in less illustrious neighborhoods, your money goes further still.)

Slower Growth, but Sustained Strength

And it looks as though, despite the general economic malaise, these top markets are likely to remain relatively strong for the foreseeable future, even if they won't see the extraordinary growth of the past few years. Liam Bailey, head of residential research for Knight Frank, says prime markets had a relatively good year last year but are "on the tail end of a boom."

For example, in the fourth quarter of 2007, prime real estate in once-booming Dublin fell 15% from the same period the year before, according to Knight Frank. Prices in other markets such as London and Tokyo continued to rise through 2007 but softened a bit this year. Luxury property prices in St. Petersburg at the end of last year were 38% higher than the year before, but that's nothing compared with the 95% price growth in 2006.

London remains one of the world's most robust markets, thanks in no small part to its position as the financial capital of Europe. Prices for prime real estate jumped 29% in 2007. But the city's strongest price category has narrowed from £1 million ($1.98 million) and higher to more than £10 million, Bailey says. In other words, only the very top of the market is still seeing growth.

The sustained buoyancy of cities such as London and Paris and resort areas like Monaco or Gstaad is partly the result of their appeal to newly minted millionaires from Russia, China, India, the Gulf states, and elsewhere. Like wealthy Americans and Europeans, they don't feel as affected by the changing economic conditions. In fact, many are actually helped by the downturn, especially in the U.S. where the dollar is trading at a discount to currencies such as the euro.

Confidence Issue

But even the most expensive markets aren't immune. "You see price growth at the very best locations. If properties are perfectly positioned, if they have no faults, if they are perfect, you will see perfect price growth," Bailey says. "Most markets are tailing off."

David Michonski, CEO of Coldwell Banker Hunt Kennedy in Manhattan, says the softening of international real estate markets is a "normal correction in a major long-term bull market that started 10 years ago." He adds: "I don't believe it's a function of the credit crisis. It's a confidence issue at this point.… Everybody in the world has been told that wherever the real estate markets are, they're going to fall."

In Tokyo, prices began to soften soon after the subprime problems in the U.S. came to light, says Ryuichiro "Drew" Iwanami, director of global business development for Japan Sotheby's International Realty. But Tokyo, which experienced a "mini-boom" from 2003 to early 2007, is also dealing with an oversupply of condos that were built in the low-interest-rate environment of the last few years, he says. The mini-boom followed Japan's real estate collapse in the early 1990s, when prices for some rural properties fell to 10% of their peak price. "You're beginning to see a slump in the sales of high-end condominiums…[and] the rate of price increases is stabilizing," Iwanami says. "You may see more of that in the next 12 months."

Still, the softening of real estate markets has at least one silver lining, especially in hard-hit cities such as Miami. Buyers from Canada, Europe, and South America are flocking to neighborhoods such as South Beach and Coral Gables, where home prices are tumbling. For Europeans, Miami's declining condo prices are "like Americans handing them the gift of the century," says Michonski. "The sun has not stopped shining. The beaches aren't any less white, and the whole thing costs them 30% or 40% less."

World's Most Expensive Luxury Real Estate Markets

Take a look around the world at what $1.5 million buys in 20 of the world's most expensive housing markets.

1. London
Price: $6,191 per sq. ft.
What you get for $1.5 million: Small studio apartment
Annual price change: 29%*

A housing boom began in Central London in September, 2005, and continued through 2007, as wealthy buyers flowed in from around the world. The annualized growth for prime real estate is slowing this year and is expected to weaken further. But the super-luxury segment remains incredibly strong. Sales for £10 million-plus homes in Belgravia, Chelsea, Knightsbridge, and Mayfair increased by 190% in the six months ending January, 2008, compared with the same period a year earlier.

* The annual price change compares the fourth quarter of 2007 with the fourth quarter of 2006.

2. Monaco
Price: $5,888 per sq. ft.
What you get for $1.5 million: Studio apartment
Annual price change: 25%

It's not just the casinos, beautiful people, and staggering views of the Mediterranean that have made Monaco a popular home for the world's wealthiest buyers. The real appeal is that its residents don't pay income tax.

3. St. Jean Cap Ferrat (France)
Price: $5,853 per sq. ft.
What you get for $1.5 million: Small studio apartment
Annual price change: 39%

St. Jean Cap Ferrat on the French Riviera continues to be popular with European aristocracy and the super-rich, such as billionaire Paul Allen, who enjoy the gorgeous beaches and warm weather.

4. Courchevel (France)
Price: $4,710 per sq. ft.
What you get for $1.5 million: Studio apartment
Annual price change: 5%

Like to ski and shop? This resort town high in the Savoie region of the French Alps is favored by the Russian elite and is known for expensive hostelries such as the Hotel Le Lana, fashion boutiques, and wild parties.

5. Hong Kong
Price: $4,507 per sq. ft.
What you get for $1.5 million: Studio apartment
Annual price change: 21%

Hong Kong's real estate market has been driven by China's strong economic growth. Despite limited space, real estate demand on the island has started to slow, and prices are softening as the effects of the U.S. credit squeeze spread.

6. Manhattan
Price: $4,320 per sq. ft.
What you get for $1.5 million: Studio apartment
Annual price change: 25%

At the high end, Manhattan continues to boom even as the credit crunch deepens. In fact, in the first quarter of 2008 average prices were up 19% and the price per square foot was up 16%, according to the Corcoran Group. There are several reasons: First, the city has been shielded from the subprime crisis, largely because its co-ops and condos are well out of reach of most buyers with poor credit and shaky finances. Second, it remains a popular destination for movers and shakers in the financial, entertainment, and media world. Last, because of the weak dollar it is more affordable than ever for wealthy foreigners looking for a Manhattan pied-à-terre.

7. Cortina d'Ampezzo (Italy)
Price: $3,028 per sq. ft.
What you get for $1.5 million: 1 bedroom
Annual price change: 22%

The Northern Italian resort town is a popular second-home destination for ski buffs and Milan's business elite. Prices for prime European vacation homes have benefited from the growth of the world's population of high-net-worth individuals.

8. Portofino (Italy)
Price: $2,692 per sq. ft.
What you get for $1.5 million: 1 bedroom
Annual price change: 14%

Although there's no beach, the harbor of this resort village on the Italian Riviera is packed with yachts owned by the world's rich and famous. The village is about 20 miles from the Genoa airport.

9. Singapore
Price: $2,423 per sq. ft.
What you get for $1.5 million: 1 bedroom
Annual price change: 31%

The city's high-end real estate has benefited from an influx of foreign buyers and has been particularly strong close to the Orchard Road shopping area and on the island resort of Sentosa.

10. Tokyo
Price: $2,334 per sq. ft.
What you get for $1.5 million: 1 bedroom
Annual price change: N/A

Despite traditionally astronomical prices and cramped living conditions for all but the very wealthiest, Tokyo's market is beginning to slow as a result of the credit crunch and a heavy supply of new condos that have recently come on the market.

See Moscow, Paris, and more of the world’s most expensive cities...

The number of foreclosed homes owned by lenders continues to rise despite signs that they are increasingly willing to slash prices to sell those properties.

Lenders and investors in mortgages owned about 660,000 foreclosed homes in April, up from 493,000 in January and 231,000 in January 2007, according to First American CoreLogic, a research firm based in Santa Ana, Calif., that collects data from lenders and county clerks. The April total works out to about one in seven previously occupied homes available for sale nationwide.

A surge in defaults has increased the inventory of bank-owned homes, known in the trade as REO, for "real estate owned." By cutting prices, lenders have managed to increase sales of such homes sharply in recent months in some cities hit hard by foreclosures, including Las Vegas, Detroit and Sacramento, Calif., local real-estate brokers say.

With home prices falling, "holding the assets means further losses," said Mark Fleming, chief economist for First American CoreLogic. Some lenders now are cutting prices as often as every 20 days on homes that aren't selling, said David McCarthy, chief executive officer of Integrated Asset Services LLC, a Denver-based company that helps banks value and sell REO homes.

But lenders haven't yet managed to catch up with the inflow of foreclosed homes. Mark Zandi, chief economist at Moody's Economy.com, forecasts that the inventory of REO homes won't peak before the end of 2009.

In dollar terms, foreclosed one- to four-family homes owned by lenders whose deposits are insured by the Federal Deposit Insurance Corp. more than doubled to $8.56 billion at the end of the first quarter from $3.59 billion a year earlier.

The REO glut is weighing on house prices in many areas, as banks tend to cut prices faster than other sellers. A new set of local home-price indexes, to be introduced this week by Integrated Asset Services, shows that the median price of homes sold in Riverside County, Calif., in April was down about 29% from a year earlier. The median price fell about 13% in Clark County, Nev., and 12% in Arizona's Maricopa and Pima counties. Median-price comparisons can be skewed by shifts in the proportions of high- and lower-priced homes sold from one year to the next but provide a broad indication of market trends.

To avoid or at least delay losses, many lenders are trying to avert foreclosures by easing loan terms or giving struggling borrowers more time to catch up. Hope Now, an alliance of mortgage companies and investors, said last week that mortgage companies completed loan workouts for 183,000 households in April, up from 160,000 in March.

Meanwhile, long-term interest rates rose last week, marking another potential drag on the housing market. The average rate on 30-year fixed rate loans eligible for sale to government-sponsored investors Fannie Mae and Freddie Mac was 6.17%, up from 6.02% a week earlier, according to HSH Associates, a financial publisher in Pompton Plains, N.J.

Miami Beach, Fla. --Yes, this state is on sale. But how cheaply can you get a weekend home?

After all, not everybody is in the market for a multimillion-dollar residence, or is ready to spend $1,000 a month on condo fees.

So what kind of deals are out there now for the rest of us?

The answer is that for less than $200,000 you can now get something pretty reasonable, on or near the water.

Whether you count that as value may depend on a lot of things. But these are prices not seen down here since well before the bubble.

For example, $150,000 might now get you a three-bedroom house in a distressed sale in Cape Coral, a town on the Gulf coast just north of Naples. "I've got one in a short (read  distressed) sale," says local agent Joan Psarros at Re/Max. "It's 2,000 square feet, on a fresh water canal, and it has a pool. It's only a few years old – it was built in 2005."

The owner, a speculator from Connecticut, paid $275,000 for it in the boom.

Some of the best bargains are to be found in the southeastern crescent, from Miami to West Palm Beach. That's where the torrent of new homes flooding onto the market has washed all prices downstream.

In West Palm Beach, if you look hard, you can find new, upscale one-bedroom condos for less than $200,000 if you look hard. A few years ago, when they were being built, the same units were selling for nearly twice that.

You have to do serious detective work to find the best deals. Look beyond the sticker prices. There is a lot of inventory around. There's often a desperate seller.

I looked at one unit that was on the market for $225,000 – while a few floors below an almost identical apartment was being offered in a distressed sale for $175,000.

In Fort Lauderdale, the cheapest bargains are in some of the older co-ops a few blocks from the beach. I looked at some one- or two-bedroom units for around $150,000. A few years ago, they would have cost around $250,000 or more.

No, they aren't fancy. The architecture is what brokers, with some humor, call "mid-century modern." That means they were new in 1950.

But the buildings are perfectly sound, your fees may be only $200 a month, and you'll find yourself with a pool and a five-minute walk to the beach.

If you want to go 20 minutes west, $200,000 or less will buy you a brand new two-bedroom unit in a development with gyms, spas, pools and tennis courts. When they were being built, they were being sold for twice that.

But probably the cheapest deals I saw were in the historic Art Deco district of Miami Beach itself. Here you can get small one-bedroom units for well under $200,000. Some are selling for much less than that.

South Beach broker Leslie Cooper of Douglas Elliman Florida showed me a tiny one-bedroom of about 450 square feet that is being sold in a distressed sale for $139,000. You might get it for less. The owner, an artist, bought it a few years ago for $175,000 and has also fixed it up beautifully. You even get a designer bathroom, if such things matter to you.

I also looked at one-bedroom units nearby that had been completely renovated and are now being offered for about $170,000.

Lots of these places are on the market in the Art Deco area. They're a short walk from the Lincoln Road shops and restaurants and a short walk to the beach. What else are you looking for? You'll even have the New World Symphony around the corner.

At the height of the boom these prices were a lot higher. "A few years ago many of these types of units were selling for $230,000, some as high as $270,000," says Ms Cooper, the real estate broker.

By the standards of the Northeast, let alone Europe, these prices seem cheap. To those elsewhere in the country, they may not. But they are certainly a lot cheaper than they were.

Americans' love affair with real estate may be cooling, but -- thanks to falling home prices and the weak dollar -- attention is heating up from another group of suitors: foreign investors.

Foreign buyers have long looked to certain U.S. markets, such as high-end properties in Manhattan or South Beach Miami, as investment opportunities.

These days, however, real-estate professionals report increased international interest in a much larger range of properties, from $60,000 single-family homes in South Florida's inland neighborhoods to $1 million waterfront villas located just miles from the Canadian border in Washington State.

Almost one in five, or 18%, realtors surveyed by the National Association of Realtors last year said they sold homes to international clients between April 2006 and April 2007. More recent data aren't yet available, but according to anecdotal evidence, those numbers continue to rise.

"There definitely is more interest in U.S. properties, no question about it," says Mark Partin, president of Trailridge Property Corp., of Toronto, which brokers deals between U.S. developers and Canadian investors interested in buying residential properties in "bulk."

For many foreign buyers, property in the U.S. is cheap. Foreign buyers also seem more optimistic about the long-term health of the U.S. market, says David Michonski, a certified international property specialist and chief executive of Coldwell Banker Hunt Kennedy in New York. "The foreign buyer has an unbridled confidence in the U.S. market that is lacking in the domestic purchaser today," he notes. "They view this as the bargain of a lifetime and are terribly excited about it."

Four years ago, she bought her first condo in a glassy new Miami tower when the building was filling up. Now nearly one in six residents in the 43-story building is battling foreclosure and their contributions to the building association are shrinking. Each of the remaining owners has had to chip in an extra $1,000 assessment and $50 more a month for cable and Internet. That is on top of Ms. Sanz’s $450 monthly maintenance fee.

Even though she pays more, her building has broken washers and dryers and unusable exercise equipment, and her hallway is spotted with mold.

“It’s not fair,” said Ms. Sanz, a 32-year-old event planner. “The first two years, I enjoyed all of the benefits of living in a condo. I’m disappointed now. I hate the way the building looks.”

When people buy condos, they expect their monthly fees will cover many of the responsibilities that they would otherwise have as owners of single-family homes, like cutting the grass and paying the water bills. Now many find themselves nagging each other in the hallways to pay their assessments and adding special fees while haggling over chores. In Miami, Chicago and San Diego, condo owners are adjusting to the economic woes, sometimes by mowing themselves and working shifts for building security — all while lamenting their lost community.

“What motivated people to go into the condo market in a way that led to overbuilding was the expectation that it would be easier than owning a home on a maintenance basis,” said Sam Chandan, chief economist at the real estate research firm Reis. “The downside is that your fate is tied to 50 or 100 other people who may stop making their condo payments.”

Many of the numbers compiled on home sales specifically exclude condos, which account for one out of eight homes in the nation, and that missing data may be masking just how weak the housing market really is. Sales of existing condo units were down 26 percent in March from a year earlier, compared with an 18 percent decline for single-family homes, according to the National Association of Realtors.

The pain in the condo market, mostly in urban areas, may not only be deeper than in the rest of the housing market during this downturn but more prolonged. Bargain hunters say they are reluctant to buy into a building even when the upfront cost seems low because they might have to pay unexpected fees as distressed neighbors default on their mortgages or just stop paying the association fees that cover everything from taxes to pool maintenance to air-conditioning repair.

Marcus & Millichap Real Estate Investment Services, which is based in Encino, Calif., estimates that nearly 202,000 condo units will be added this year to the pool of 574,000 added nationally in the last five years. Next year will bring 94,166 more units onto the market.

“We have not even approached the bottom and will not approach the bottom until 2009,” said Hessam Nadji, managing director of research services at Marcus & Millichap.

The shabby condition of some condos means potential buyers insist on especially steep discounts on foreclosed units. Alessandro Comoglio, a 34-year-old investor from Italy, recently visited six apartments in Ms. Sanz’s Miami building with a real estate broker. Mr. Comoglio was surprised to find worn-out hallway carpeting and orange foreclosure stickers partly scratched off the doors in such a new building.

His willingness to spend stopped short of $200,000 for the condo units, which once sold as high as $700,000, according to the broker, Peter Zalewski. Mr. Comoglio also wants a written guarantee that he would not have to pay more fees.

“Nobody knows if the worst is yet to come,” he said. “Nobody knows how much prices will continue to drop.”

Rosa Rodriguez, a resident and property manager at Parkview Point Condos in Miami Beach, says her former neighbors have left her with so many problems that she would never buy a condo again. The 38 foreclosures in her 244-unit building and the unpaid dues nearly cost the residents running water because the building could not pay its bills. The building abruptly stopped repairing its ceiling lobby and left its wiring and ducts exposed when the board ran out of money. She avoids answering questions from visitors about ceiling repairs.

“We’re not going to tell them we don’t have any money,” she said. “That’s embarrassing

Miami has a new vice: bottom-fishing for condo bargains.

Home buyers from around the U.S. and abroad are descending on Florida to buy condominiums that have suffered sharp price drops amid the housing glut, subprime-mortgage crisis and credit crunch. Some are searching for investment properties, confident home prices will eventually rebound. Others are hunting for vacation or retirement homes. Yet pitfalls abound, and experts warn that prices could dip even further.

In hard-hit Miami-Dade County, condos originally costing as much as $1.4 million at the peak of the market now sell in some cases for $840,000, a 40% drop. Farther north, a coming auction at Solaire at the Plaza, a new condo tower in downtown Orlando, has set a minimum selling price of $170,000 on 24 one-bedroom units once priced as high as $296,000.

such price drops have people like Bruce and Suzanne Bowen, of San Juan, Puerto Rico, stalking deals. The Bowens have visited Miami three times since November to scout for properties, and recently bought a two-bedroom, 1,200-square-foot unit on a high floor with water views in Miami's fashionable Brickell district. Mr. Bowen made his move after prices in the building fell to $290 a square foot from nearly $400 in September. Now, the couple is looking for a second condo.

"We've been coming here for 10 or 12 years, and I know how much cheaper it is today," says Mr. Bowen, a 46-year-old banker. "I may miss the bottom by 10% or so, but five years from now, that will be irrelevant. The underlying fundamentals are still very strong here."

Florida is a microcosm of what's happening across the country. As the price of condos -- which tend to be popular among investors, retirees and second-home owners -- take a dive in many once-hot markets, buyers are emerging to grab properties on the cheap. They're finding plenty to choose from.

In Atlanta, unsold condos outnumber sales for the past 12 months by more than 4 to 1, according to Haddow & Co., an Atlanta real-estate consulting firm. Typically, supply is about 1.2 times demand. In Las Vegas, more than 16,000 condo units are under construction and nearly 18,000 more are proposed, according to SalesTraq, which tracks new-home construction. Those projects were launched during the boom but are coming to market during the bust, and investors who originally put down money to hold a unit "are now trying to get out from under those deals with the developer," says John Restrepo, a Las Vegas real-estate consultant. "Many are walking away from their deposits." San Diego, meanwhile, is attracting Arizonans buying condos for as much as 50% off the high prices set in 2004 and 2005.

Because of Florida's perennial popularity among real-estate investors and vacation- and retirement-home buyers -- and as young families have migrated there from other states -- many areas were flooded with new projects in recent years. Now, amid the downturn, Florida condo sales are sharply down, off an average of 27% in 2007 from the year before, says Sean Snaith, an economist at Orlando's University of Central Florida.

Perhaps nowhere is the carnage -- as well as the opportunities and risks of condo bottom-fishing -- more evident than in Miami-Dade County, where about 25,000 condos are currently for sale, according to Multiple Listing Service statistics. That number could well surge: Cranes needle the city's skyline, and though several projects have been mothballed, new condo towers in various stages of completion rise everywhere. By most estimates, 12,000 to 15,000 more condo units will become available over the next 18 to 24 months. Given that about 10,000 condos are sold in a typical year in the area, the supply overhang means prices may fall further.

That doesn't mean bargains litter the beach or that prices are as low as some buyers hope. Alicia Cervera Lamadrid, chief executive of Miami real-estate firm Related Cervera Realty Services, says too many buyers call nowadays "expecting to pay 50 cents on the dollar, and they're not going to find that." For the most part, prices are back to about 2003 levels, meaning they're down 10% to 40%, depending on building and location.

Of course, buyers shouldn't be seduced by big price drops alone. While buying in perennially popular areas can make sense, chasing deals in other areas may not be so wise. During the heyday, builders ventured well outside of Miami's core into what are effectively frontier markets. Midtown Miami, for instance, a condo development located a few miles north of downtown in an industrial neighborhood with little scenic appeal, is lightly occupied. Such properties "will take a decade or longer to come back," says Peter Zalewski, who runs Condo Vultures, a real-estate investment consulting firm in Bal Harbour, Fla. The developer of Midtown Miami didn't return calls seeking comment.

Other condo towers, meanwhile, were built after several major hurricanes ripped through the region in recent years. That pushed construction costs sharply higher, as demand spiked for building materials and labor, and has resulted in gaping price disparities among different developments.

The result is apparent on Biscayne Boulevard, where four towers sidle against each other. Though the views, location and materials are all similar, two buildings -- Marina Blue and Ten Museum Park -- began construction prior to the hurricanes, and units there are priced today at roughly $400 a square foot. The other two -- 900 Biscayne Bay and the Marquis -- began going up after the hurricanes and are priced in the $600-per-square-foot range.

Another potential hazard for buyers: foreclosures. In some buildings, foreclosures represent as much as half the units, according to Florida's Office of the Condominium Ombudsman. A high foreclosure rate means special assessments will likely be imposed on owners of remaining units at some point to help pay for common maintenance costs. That can unexpectedly raise your cost of ownership.

Moreover, foreclosed properties in South Florida tend to be priced near the mortgage amount. Given the run-up in prices before the shakeout, that means foreclosure buyers could pay inflated prices at the auction block. A better approach: Wait for banks to reclaim property that doesn't sell at auction. Local real-estate agents say you're more likely to be able to negotiate a better bargain then.

None of this is stopping buyers from flocking to the area. Mr. Zalewski and Jenny Huertas, the husband-and-wife team running Condo Vultures, are inundated these days with out-of-town buyers coming from as far away as California, Colombia and Germany. On a recent Friday, they showed seven units to Jeffrey and Deborah Boyer, a Harrisburg, Pa., couple who've made three trips to Miami in recent months to "cherry-pick the market," Mr. Boyer says.

The Boyers, both 54, want a one- or two-bedroom unit with a boat slip priced between $300,000 and $500,000. "This place might sit here for a few years before we're ready to really use it," Mr. Boyer says. "But we're ready to buy now, if we can find the right place, because prices have come down so much."

But in a market that is laden with properties that were acquired by banks through a foreclosure process or sold through bank-approved short sales, it would seem difficult to ignore them. How are individual agents, real estate brokers and brokerage companies addressing this issue of which comps to use and which ones not to use? REO properties could have a host of issues that typical properties do not. A participant at the Appraiser Talk online forum noted that these are challenging times for appraisers, too, in determining which properties will best serve as comps for formal appraisals.

REO and short-sale properties, as distressed properties, may fetch less than those properties that are not in a foreclosure process and are not under any pressure to sell quickly. Even after they are listed for sale, REO properties could suffer "a significant amount of damage or vandalism (stolen copper pipes, break-ins, water pipe bursts ruining floors, etc.)" that could differentiate them from otherwise similar properties, for example, according to a post at the Appraiser Talk site. And how do agents approach a CMA for an REO or short-sale property when there aren't any other REO or short-sale properties in the neighborhood?

It's expected the deal will only apply to owner-occupied homes -- not those purchased by speculators. Only homeowners who are current on their payments but cannot afford a higher adjusted rate would be eligible. Borrowers with loans made between Jan. 1,  2005, through July 30 of 2007 who face interest rate resets between Jan. 1, 2008, and July 31, 2010, would reportedly be able to seek a reprieve.

There has been considerable debate about this proposal, and whether you like it may depend on who you are. If you are a prospective homebuyer rooting for massive price declines, the plan may be bad news, because its most fundamental goal is to prop up home prices

So what's the bottom line for the industry? You tell us. If the more than 2 million ARM loans that are scheduled to reset in the next two years are allowed to do so, will there be any lenders around to finance home purchases? Will an interest rate freeze keep prices from returning to levels that are based on market fundementals, and discourage buyers from reentering the market?