Housing Wire summarized a report put out by RadarLogic that shows a 5.9% drop in housing prices in May from the previous year.

All of the predictions of recovery seem to be unraveling based on this and other recent news. 

The decrease in equity will lead to more defaults and more families facing foreclosure.  In order for the United States to be able to consume this drastic increase of inventory, the need for Realtors to negotiate short sales effectively will no longer be an option; it will become a necessity.

Our prediction is that by 2012, 50% of all houses will be underwater.  How are you preparing for this market?