"Can you help us? We need to sell our house. It's prime property right on a lake. But my husband and I are both in our mid-70s and we need help with some of our daily activities. We decided to find an assisted living place instead. But our realtor said that the housing market is terrible, and we won't be able to get what we're asking. We need that money for rent. Please help us."

The continuing downturn in the U. S. housing market has impacted many of us, but it's perhaps been the most painful for those who are least able to wait for an upswing: some of the nation's seniors, whose health and personal circumstances have made them desperate to make a near-term lifestyle change.

The current housing market has especially hit those seniors, like Arnie and Sarah, who recently wrote to us. They're looking for help, and they need it right away. These two need the kind of assistance with their daily activities that would be available in a senior housing facility, but they realize that they will have to sell their current home and use the sales proceeds to be able to do so. They also realize that, as seniors, they'll have to personally pay for most of their housing needs: federal programs, such as Medicare, are unavailable for these purposes, and Medicaid is an option only when the applicant's personal assets have been exhausted.

Arnie and Sarah, however, are most likely unaware that the costs of many retirement communities—even those with few frills--can be staggering. For example, a recent study found that the average monthly cost of a nursing home stay is nearly $5,000! This means that, for most aging and disabled seniors, their ability to move will be contingent upon the sale of a single-family home at prices that are unavailable in the current market.

Facing what is perhaps the worst housing market since the Great Depression, most seniors will find it almost impossible to find buyers for their outdated homes. And, with the current glut of unsold houses in many markets, even reducing the asking price may not solve the problem.

The clogged housing market, coupled with the over-building of seniors'-oriented housing in many metropolitan areas, has resulted in rising vacancies in these facilities—particularly in those markets where the single-family housing market is most distressed. Tampa, Florida, to cite only one example, is experiencing a 12 percent vacancy in senior housing units, up dramatically from four percent from the previous year.

A handful of retirement-home marketers who do business in these over-built areas are relying on Realtors to help their prospective clients to sell their existing homes. The problem with this strategy, of course, is that elders' homes are frequently antiquated or need substantial repairs and renovations in order to make them marketable. Outdated wallpaper, old appliances and poor maintenance, all characteristic of these houses, often deter buyers. This means that their homes, which are their major assets, are unmarketable, particularly in the current depressed housing market.

"The idea is that a senior has built up equity in [a] house, and this assures that they can have care for the rest of their lives," says Larry Minix, of the American Association of Homes and Services for the Aging.

A recent national survey found that nearly 25 percent of seniors age 65 and over haven't made any improvements to their homes for 10 years or more. About half of them reported that they don't intend to spend any money to improve their homes, even if doing so would attract buyers.

Even worse, for many seniors, just as the real estate bust has depreciated the value of their primary asset--their homes--the value of their retirement accounts has recently plummeted as well.

What about Arnie and Sarah? They're just two more victims of the disastrous sub-prime mortgage mess that has devastated the entire American economy.