All investments depend on making returns, which in turn are affected by macro cycles such as the Great Depression or the dot-com boom. When a market is receding, it makes more sense for long-term, stability-seeking investors to look elsewhere upon first glance. However, in the case of the housing market of many parts of the US, the likelihood of long-term housing depression are still relatively slim. Furthermore, other factors will continue to influence the stability of housing pricing in the short term.

Likely investors in most areas will be able to get great values for some time, but housing prices have statistically increased on a per-capita level for the vast majority of the past century. Even with the 30% decrease in home prices during the years of 1930-33, economic stimulus eventually prevailed. The Depression was also the primary topic of a young Ben Bernanke who, before his current position as head of the Federal Reserve, wrote a 350-page report on how the US' largest recession was due to the blunders of the then newly-created institution. Bernanke has also taken more unprecedented steps to help preserve large investment banks than homeownership, citing a housing bubble which needs a necessary (though unfortunate) correction.

As foreclosure rates continue to increase, many properties are being revalued at less than the price they were purchased at. However, this is only half the story. America's losses are oft distributed unequally. And while the Midwest generally experiencing the worst effects of past recessions, this time may be a little different. Across middle America, home prices have depressed for seven straight months, but several previously hot markets have deteriorated below pre-bubble prices. Southern California and Arizona are two examples that stand out, particularly in terms of how rapidly falling home values have affected previously booming areas.

Now consumers are hit with two difficulties which make housing slumps particularly viscous: rising mortgage payments and loss of home equity, which has restricted lines of credit for homeowners. Furthermore, the advantages of America's size are diminished in a housing slump because homeowners are unable to migrate to other areas. Historically, there have been many such exoduses from economically depressed areas in search of higher wages, but homeowners are increasingly unable to do so unless they sell their homes at a loss.

This stagnation also means that markets with rising values will continue to attract investment, while government intervention may be necessary to lift more blighted areas. The Northwest continues to experience positive property values, despite the prospects oflooming layoffs from troubled financial firms. Texas continues to experience exceptional developmental growth, and relatively stable house prices in his area likely contributed to the Dallas Fed's dissenting vote against the recent record Federal Funds Rate cut. In central Texas, development has continued relatively unabated, in contrast with other areas where property values have dropped more considerably. This reasoning indicates that these markets are likely to accelerate growth as the larger economy recovers from the sub-prime crisis, and will probably be more valuable in the mid-term by comparison to more depressed areas.

Either way, the US recession is not likely to remain too deep, thanks to the generous monetary policy of the Fed. Should current inflationary pressures continue their current trends, home prices will necessarily rebound, although not quickly enough to facilitate speculative short sells. Therefore, for those looking for the long haul, deals are out there.