What's the deal with this housing market?

Well I'm going to reveal a little bit about my recent foray into the chaotic housing market. A few months ago the wife and I decided that with historically low mortgage rates and what we thought were depressed housing prices we could possibly find our true "dream home". If you've followed the news from this particular economic sector you've probably been able to come to the same conclusion we have: financial and industry experts are fools! or, at a minimum the news of a housing crisis has yet to reach the far flung edges of desolate Maryland. If you note a hint of biting sarcasm, its because I'm pouring it on. Before I delve into my tirade against the delusional current home sellers I want to briefly outline our futile attempts to refinance our current home under the federal programs for homeowner with ARM's. To summarize, not-a-gonna happen. Well at least not without a 3rd part mortgage broker acting on our behalf and capturing a small percentage. So what's the challenge?

There seems to be a certain unwillingness amongst the lending institutions to either understand the programs, or they understand, but without any real short term consequences helping qualified homeowners (besides possible foreclosure), they don't see an upside for them. I think it's funny that these same institutions incentivize the origination of new and refinanced loans but there seems to be a disincentive for loan officers to use these programs - you should hear the change in tone when we ask about refinancing under one of these programs; diagnosed victims of head lice are probably chippier (yes. I looked up chippier and it is a word:). Round and round we've gone with several different departments and uninterested people who seem to exist if only to transfer us to their unhappy cousins in the "I will be uber polite and unhelpful" department. Maybe recent incentives provided to those mortgage lenders who do convert loans and write down principal balances will help some? Anyways, eventually we prevailed and were able to refinance and lower our payments enough to consider renting our home and moving to a Single Family home. Would be nice to sell, but in this market, are you kidding me?

So speaking of the home selling market: why do home builders and sellers in Maryland immediately think that there doing you a favor by selling you a home. Some of the builders and home sellers we've encountered almost seem indignant when we request things like closing cost help and other seller incentives. I get it. 3-4 years ago you had 10 contracts on your home by the time your realtor hit the enter key into the MLS database. Over the last few months we've actually noted a decrease in private home listings in the counties/communities were interested in. New home construction seemed to be the way to go, however all the homes we liked were still going for 2004 prices. Certainly not prices from the top of the housing boom, but definitely not prices reflecting a buyers market. Some sales people have even had the audacity to tell us: "you shouldn't settle on options, if you have better offers then you should take them". Now mind you this isn't a comment resulting from multiple back and forth sessions of negotiations and counter-offers, but in one contract meeting. There wasn't even a suggestion from the salesperson that they could possibly work with us - It wasn't like we were asking for gold-plated faucets. I understand that our area is predicted to weather the economic storm a little better than most U.S. states, but these significant job increases that the media keep reporting are going to arrive, aren't here yet. Well at least the majority aren't. With all the disillusionment we've experienced we've decided to take the following article's advice and wait a little a longer to see how the market turns, after all we've already gotten hosed once.