Even as new figures show house prices have risen for three consecutive months, concerns are growing that the real estate market will be severely tested this winter.Artificially low interest rates and a government tax credit are luring buyers, but both those inducements are scheduled to end. Defaults and distress sales are rising in the middle and upper price ranges. And millions of people have lost so much equity that they are locked into their homes for years, a modern variation of the Victorian debtor’s prison that is freezing a large swath of the market. “Plenty of pain yet to come,” said Joshua Shapiro, chief United States economist for MFR. He is forecasting an imminent resumption of price declines. This summer, housing seemed at last to be stabilizing. A flood of last-minute buyers trying to conclude a deal before the tax credit expires Nov. 30 helped push up the Standard & Poor’s/Case-Shiller home price index a seasonally adjusted 1 percent in August, it was announced on Tuesday.That was the first time since early 2006 that the widely watched measure of 20 metropolitan areas put together three consecutive increases. While underlining the importance of that long-awaited rise, Maureen Maitland, the S.& P. vice president for index services, warned, “Everything is up for grabs this winter.”

By David Streitfeld, Oct. 28, 2009, NYT
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