It's no secret that right now it's a tough time in the housing market for sellers and a confusing one for buyers. If you're selling and you have a lot of foreclosures in your neighborhood, you've probably noticed the value of your home declining. And if you're buying, you're facing a variety of exotic weirdo loans with adjustable interest rates, option payments and more. But relief may be around the corner in a market phase called capitulation. Look at markets like Denver, Salt Lake City, Houston and Southern California. These are all places that suffered through a bad real estate depression, but recovered and thrived. How did they make a comeback? Well, the ultimate measure of whether or not a real estate market will thrive is job growth.

It's also important to remember that the mortgage market is not a monolith and some segments are already in good shape. For those with decent credit seeking a conventional 15, 20 or 30 year loan, the rates are now lower than they were just a few weeks ago. What it comes down to is that a lot of speculative markets had bubble growth and it will take time for them to unwind. So if you're considering buying a home before the year is out, you may want to just wait a little bit longer until 2008. Likewise if you're in a cold climate, once winter comes there will be more opportunity, according to Clark. Think of the push toward capitulation like a baseball game; right now we're in the third inning of a nine-inning game, Clark says.