Consumer confidence is at a 16-year low, says the Conference Board. Hit hard by high gas prices, lower housing prices, and rising medical and food bills, consumers had the bleakest expectations for jobs and inflation for the next 12 months since 1982.

With job prospects weaker and core inflation up nearly four percent above a year ago, according to the Labor Department, fewer folks expect to buy big-ticket items like a car or a home.

We appear to be at the walk-away price for all kinds of goods, including houses.

In 2007, the trend to use less gasoline began in earnest with more people choosing public transportation over driving their cars. Ridership for public transportation was up over two percent says the American Public Transportation Association.

By March 2008, before some states reported record $4 a gallon gas, the U.S. Department of Transportation reported the steepest decrease in driving ever recorded. Americans drove about 4.3 percent or 11 billion miles less than a year ago in March, and the Energy Information Administration says gas consumption will be 0.4 percent less than last summer.

This behavior squares with consumer pullback on buying homes, resulting in the near record collapse in housing prices reported by the Office of Federal Housing Enterprise Oversight. In Q1-08, housing prices were down over three percent, the largest decline since OFHEO began tracking the index. The purchase index showed prices falling in 43 states, a testimony to the pervasive credit crunch and fear gripping housing markets, even in economically healthy locales.

The cities showing the greatest escalation in price declines were in California and Florida, which also experienced the greatest gains during the post 9/11 housing boom.

Bucking the depreciation trend were Wyoming (prices up 6.3 percent), Utah (up 5.6 percent), Montana (up 4.9 percent), Texas (up 4.7 percent) and Alabama (up 4.5 percent).

The reason this report is sobering is that the price declines are calculated on homes purchased with conventional loans secured by Fannie Mae and Freddie Mac, government sponsored secondary market providers overseen by OFHEO.

Unlike Standard & Poor's controversial Case-Shiller Index, which shows housing down over 14 percent for the same period, OFHEO is regarded as more upbeat, since it excludes volatile jumbo and subprime loans.

Are home buyers at the walk away price?

A glimmer of hope came via the Commerce Department which says new home sales were up over 3 percent in April. That's good news, but are still trailing last year by 42 percent, or the sales pace of 1991, the last major recession.

The Energy Information Administration says gas consumption will be 0.4 percent less this summer than last. Futures prices are already coming off $130 per barrel highs.

The housing correction is in its third year. Watch for the best deals in houses between now and the end of summer.

Published: May 29, 2008

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.