The real estate market has faced the most difficult times ever seen and it is now recovering but this process is slow because of things like high unemployment rates and the rise in the number of foreclosures. Home sales have fallen across the country and the average home prices have also dropped in almost half of the states. Some of the states that have faced the largest drop in home prices include California, Arizona, Florida, and Nevada.

The reduction in sales and cancellations have resulted in many unsold homes. Another issue that is worrying the real estate market is the fact that sub-prime mortgages account for about 25% of the total number of mortgages which translates to about $665 billion. The situation is made worse by the fact that adjustable-rate mortgages are going to be reset. The rise in foreclosures is also depressing the real estate industry further.