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For all the right reasons, John Higdon bought into the dream of being the first in his immediate family to earn an undergraduate degree.

"All through high school and college, I thought, ‘I’ll get this piece of paper and it will open up doors that weren’t open to my parents, because they didn’t go to college,’" Higdon, 24, said over a cup of coffee last week.

Instead of opening wide, however, the door cracked after Higdon earned his bachelor’s in finance from Missouri State University in December 2008.

"I’m not where I thought I’d be almost a year after graduating," said Higdon.

Nor are thousands of others in the classes of 2008-09, who marched from the commencement stage into the teeth of the worst job market since the Great Depression.

Higdon did manage to land a job in his chosen field.

But earning a commission cold-calling potential commercial insurance clients is a far cry from employment as an analyst with a prominent financial or investment firm in the St. Louis area — the objective the Hannibal, Mo., native set for himself as an undergraduate.

Nor did his short-term goal include a plan to stay afloat financially by moonlighting behind a bar a few nights a week.

"That’s the norm now," he said. "All my buddies (from Missouri State) are working two jobs, too."

Adding insult to the insult of dual employment that netted him less than $20,000 in 2009 are the bills now coming due: The $315 monthly payments on his $42,000 student loan.

His college education, Higdon said dryly, "is definitely not paying dividends right now."

His won’t be the only one, according to some experts. Look for an exponential increase in the ranks of underemployed graduates struggling to cover an education they hoped would boost their earning potential, said Richard Vedder, an economics professor at Ohio University and executive director of the Center for College Affordability and Productivity. "It’s going to be a long-running crisis independent of the recession," Vedder predicted in a telephone interview from his office in Athens, Ohio.

The economic downturn, he continued, "exacerbates the fact that beginning salaries are lower and the ratio of the amount of (student) loans to those salaries is getting higher and higher. When that happens, you’re getting into problems."

The lag in processing comprehensive higher education data makes it impossible to know how many underemployed 2008-09 graduates are wrangling with student debt.

But the U.S. Department of Education announced in September that the default rate, 6.7 percent, was already on the rise in 2007 — a year before the recession took hold.

More and more students, Vedder said, are deferring payment (and incurring additional debt) by pursuing advanced degrees. The latest statistics from the Council of Graduate Schools bear him out.

From 2007 to 2008, the council said, first-time graduate school enrollment among U.S. students jumped nearly 5 percent — the largest increase since 2002 — according to its survey of schools serving 1.7 million grad students in 2008.

John Drenkhahn of Collinsville opted for graduate school after evaluating the odds of getting a job in electrical engineering following his 2008 graduation from Southern Illinois University-Edwardsville.

"If I hadn’t gone back to school, I would have been competing with other (graduates) along with (experienced) people," said Drenkhahn, 25, who planned to graduate this summer.

While the market hasn’t improved much for graduates, Drenkhahn’s decision appears to have paid off: He landed a job.

"They agreed I’m a little overqualified in terms of education for this position," said Drenkhahn, who will handle customer support for a technical product sold by a company he did not want to name.

Although the master’s degree may not have been the difference in getting the job, Drenkhahn said he found the education useful and expects the advanced degree will help as he tries to move up the ladder. He said his new employer indicated there may be opportunities for advancement.

"That’s all I’m looking for," Drenkhahn said. "That’s all anybody who is graduating right now is looking for."

He said he was thankful to find a job with a local company. Otherwise, he was prepared to expand his search outside the area where he has lived his entire life.

Higdon, meanwhile, is staying put.

He and his girlfriend, a teacher, recently scraped together the down payment on a small condo in Valley Park. A wedding, Higdon said, will start taking shape once his employment situation is settled.

A year into the business, Higdon doesn’t rule out continuing in the insurance field, perhaps as a broker.

As he considers his options, Higdon’s eyes are on two components of the employment market — job openings in the local financial sector and the influx of graduates poised to compete for those positions.

The National Association of Colleges and Employers reports the job outlook for the Class of ‘10 is slightly better than it was for the two preceding classes. Then again, it couldn’t get any worse than 2009, when campus hiring dropped more 20 percent from the year before.

Higdon hopes there’s room in the slightly improved market for him.

"I know it’s a matter of timing, but it’s also a matter of increasing costs," he said. "I didn’t go to Dartmouth or Harvard, I went to a school that cost about $13,000 a year. I thought it was affordable, but it doesn’t pay for itself if your job prospects are poor."

Michele Munz of the Post-Dispatch contributed to this report.

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SHILOH — What recession?

If Kevin Bollman is to be believed, tough economic times have had only a minimal effect on plans for the Villages at Wingate. That’s an ambitious 172-acre residential and commercial development now partly under construction at Shiloh — not far from Scott Air Force Base.

Bollman owns J2K, a major developer of the Villages at Wingate. The project, with an estimated cost of more than $140 million, was announced in the summer of 2007. The developers have plans for 270 houses and villas, 96 apartments for older residents, 75,000 square feet of retail space and 60,000 square feet of office space.

The site is just off Green Mount Road, about half a mile north of Carlyle Avenue and four miles south of Interstate 64.

"We never stopped going forward with our plans" despite the recession, Bollman said. "And now it’s good to see the housing market recovering, at least here."

He predicted the development could be built within five years.

Many people are interested in the project, said Bollman, who touted it as the first master-planned community that has come to fruition in Metro East.

The first of two independent living apartment buildings for older residents has been completed and will be ready for occupancy within a few weeks.

Three new houses already are occupied, and about 15 more are under construction, Bollman said. The houses range in price from slightly more than $160,000 to almost $300,000.

Six homebuilders have been involved in the project, and a seventh builder — Dettmer Homes — signed on this month and announced it would build on 82 of Wingate’s 221 single-family sites.

Scott Dettmer, general manager of Dettmer Homes, said his company, which already started building a display house at Wingate, has plans to build houses worth a total of nearly $22 million there.

Other builders with houses either under construction or planned at Wingate are J2K, JLP Homes, McFadden Homes, DF Contracting, New Tradition Homes and Carda Construction.

The architect on the Villages at Wingate is TRi architects. TWM Inc. of Swansea provided the civil engineering for the project. The contractor on the proposed commercial and retail part of the project is Grubb & Ellis Gundaker Commercial.

Developers also are working with the Mascoutah School District for a new elementary school on the project site that could be built in three to five years.

Mascoutah Superintendent Sam McGowen said the school could cost more than $8 million and have space for up to 600 pupils. He said a site for the proposed school already has been graded, near the entrance along Wingate Boulevard.

"I think that area is going to grow soon, and the developers have been great in working with us," McGowen said. "But the school is sometime in the future. The development has to generate revenues … in order to sell the bonds for the school."

Near the center of the Wingate project is a graded site for a 2,000-square-foot clubhouse and adjoining playground.

Bollman said another distinctive feature is a planned section of multi-family row houses, designed in a style echoing a century ago, "kind of like what you’d see at Lafayette Square." Carda Construction is the contractor for those homes.

The project also includes about 30 acres of green space and a planned walking trail.

"When we were putting this whole project together, I was adamant that we had to be unique," Bollman said.

And what’s with the name, Villages at Wingate?

Bollman said he read something a few years ago about an eccentric British Army general named Orde Wingate, who died in a plane crash during World War II. Bollman said he remembered that name and just decided it had a nice ring to it.

That also explains the British influence on the project’s street names, including London Lane, Welsh Drive and Downing Court.

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Sales of existing U.S. homes plunged more than anticipated in December, showing the dependence of the housing market on a government tax credit.

Purchases slumped 17 percent the month after a government tax credit was originally due to expire, the biggest decline since records began in 1968, to a 5.45 million annual rate, the National Association of Realtors said today in Washington. The median sales price increased for the first time in two years.

First-time buyers rushed to complete deals before the $8,000 government incentive was due to end, pushing sales up 28 percent in the three months to November. The subsequent extension and expansion of the credit to include closings through June signal demand will strengthen in the first half of 2010, while raising the risk the market will then slow anew should jobs remain scarce.

“We’ll see a pickup in existing home sales in the next couple of months,” said Adam York, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who forecast a 5.4 million sales pace. Although “we’re past the bottom,” he said, “I don’t think there’s going to be a lot of buyers out there looking for a home outside of the tax-induced effects until they feel more comfortable with the labor market.”

Stocks trimmed earlier gains following the report. The Standard & Poor’s 500 Index rose 0.5 percent to close at 1,096.78. The S&P Supercomposite Homebuilder Index was up 0.2 percent.

Less Than Forecast

Economists forecast existing home sales would fall to a 5.9 million rate in December from a 6.54 million pace the prior month, according to the median of 61 projections in a Bloomberg News survey. Estimates ranged from 5.4 million to 6.75 million.

For all of 2009, existing home sales rose 4.9 percent to 5.16 million, the first gain in four years, from 4.91 million in 2008. The median price last year was $173,500, down 12 percent from 2008, the biggest annual drop on record and probably the largest since the Great Depression, NAR chief economist Lawrence Yun said in a news conference.

The median value in December was $178,300, up 1.5 percent from the same month in 2008. The increase was the first since August 2007 and the biggest since May 2006, the agents’ group said. A decline in the number of first-time buyers, who usually purchase less expensive houses, helped push up the median value last month, Yun said.

First-Time Buyers

The share of homes sold to first-time buyers fell to 43 percent in December from 51 percent the prior month, Yun said, indicating the expected end of the tax credit played a role in the drop in sales no fax payday loans.

President Barack Obama and Congress extended the first-time buyer credit in early November to cover deals signed by April 30 and closed by June 30, and expanded it to include current homeowners. Even so, some economists believe the original measure pulled sales forward, restraining demand for a few months.

Yun said he was “generally pleased” with the December outcome since he feared an even larger drop following the expected expiration of the tax credit. “There is an increase in home-buyer confidence,” he said, adding “there is some sustainable momentum” in sales. Even with the decline, sales were still up 15 percent from the same month last year, signaling a general improvement, he said.

The number of previously owned homes on the market decreased 6.6 percent to 3.29 million, the lowest level since March 2006. At the current sales pace, it would take 7.2 months to sell those houses, compared with 6.5 months at the end of November.

Fed Action

The end of Federal Reserve purchases of mortgage-backed securities aimed at keeping borrowing costs low represents a challenge for the industry. The program is scheduled to expire by March 31.

Policy makers are scheduled to meet this week to discuss the direction of the benchmark lending rate between banks. The emergency programs were being wound down “in light of ongoing improvements in the functioning of financial markets,” central bankers said in their Dec. 16 statement.

Joblessness and foreclosures are other concerns. Unemployment is forecast to average 10 percent this year, the highest level in seven decades. A record 3 million U.S. homes will be repossessed by lenders this year, RealtyTrac Inc. forecast on Jan. 14. That is up from 2.82 million in 2009, the most since the company began compiling data in 2005.

Competition with foreclosures has been especially daunting for homebuilders. KB Home, the Los Angeles-based homebuilder that sells to first-time buyers, said Jan. 12 that fourth- quarter revenue dropped 27 percent.

KB Home’s orders rose 12 percent to 1,446 from 1,296 in the year-earlier quarter, while completed sales dropped 22 percent to 3,042. The company is “not going to make money in the first quarter” and plans to “restore profitability” in the second half of 2010, Chief Executive Officer Jeffrey Mezger said Jan. 12 in a conference call with analysts and investors.

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Oil prices plunged Wednesday on a stronger dollar and amid investor concern that the Chinese government will continue to tighten its credit policy.

What prices are doing: Oil fell $1.87, or nearly 2%, to settle at $77.62 a barrel, after dipping as low as $76.96 a barrel earlier in the session.

On Tuesday, oil rose for the first time in six days, recovering from its lowest level so far this year.

What’s driving prices: Reports that China has asked major banks to cease lending until the end of the month in order to tighten the country’s credit market spooked investors. The news comes a week after the Chinese government raised bank reserve requirements for the first time since 2008.

"This shows us that China is serious about slowing down its explosive demand growth," said Phil Flynn, a senior market analyst at PFG Best. "If the Chinese government continues to take steps to slow the economy, it’s going to be bearish for prices in the short term fast cash now."

Meanwhile, the dollar rose as investors lost their appetite for risk, worrying about China’s attempts to slow its economic growth.

"That market seems to be on fire today," he said. "The dollar’s incredible strength is definitely going to put pressure on the market."

What analysts are saying: "It’s going to be harder and harder to maintain these prices," said Flynn. "There’s no doubt the economy is getting better, what is in doubt is whether that translates into $78 to $80 prices for oil."

Flynn said he wouldn’t be surprised to see a major sell-off in the next couple of months and he predicts that oil may drop as low as $40 a barrel. 

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Former Federal Reserve Chairman Paul Volcker said Thursday that more needs to be done to regulate the financial system before the lessons of the recent crisis are forgotten.

"We must not shrink away from change but accept the need for basic financial reform," said Volcker, currently chairman of President Obama’s Economic Advisory Board, in remarks to the Economic Club of New York.

He said the economy appears to be growing slowly, and that the financial crisis is beginning to seem to some like a "bad dream."

But the magnitude of the crisis showed that the underlying problems are "more fundamental" and require "broad reform" of the financial system, he warned.

The former Fed chairman said the central bank should play a key role in overseeing the financial system. Among his ideas, he said the Fed should have the power to dismantle big banks that pose a systemic risk to the economy.

"The old question (about banks) colloquially described as ‘too big to fail’ looms larger than ever," Volcker said.

In a response to recent criticism of the Fed, he said the central bank is less subject to political pressure than other regulatory bodies.

"These days, best-selling books remind us that the challenges to that structure, and particularly to the Fed’s insulation from political pressure, arise from time to time," Volcker said, referring to a popular book by Rep. Ron Paul, R-Texas.

"The sense of anger about the amount of funds required to bail out both institutions and markets is palpable," he added. "But that truly exceptional response to the financial crisis — drawing on long-dormant emergency powers — was a properly coordinated decision with the administration, not a misuse of independent authority."

The remarks came on the same day that President Obama called on Congress to tax the largest banks to ensure that U.S. taxpayers don’t lose a penny from the federal bailout of the financial, auto and insurance industries over the past year

Volcker said the proposed tax "seems to me to be a not unreasonable response." He said the banks subject to the tax have benefitted from taxpayer aid and "should carry their share of the burden."

The proposed "financial crisis responsibility fee" is aimed at large institutions that received significant federal aid during the height of the crisis, but have since recovered and are now poised to pay tens of billions of dollars in bonuses.

On Wednesday, four top bank chief executives went before a panel to answer questions about the role their institutions played in causing one of the worst financial shocks in a generation.

The CEOs of Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500) told the Financial Crisis Inquiry Commission that they made mistakes but didn’t realize how bad they were at the time. 

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Target Corp. on Friday announced a new national TV delivery and installation service.

Target (NYSE: TGT) customers who purchase TVs in-store can have the products shipped to their home and installed staring at $99.

The nationwide service is part of a growing partnership with Minneapolis-based Zip Express. The two firms joined up in 2008 to deliver and install TVs that customers purchased over Target.com.

According to the firm’s web site, Zip Express has 16,000 installers from coast to coast and delivers to every U guaranteed online personal loans.S. ZIP code.

Some prices for Minneapolis-based Target’s services include:

• Any size TV delivery and setup - $99
• TV in-wall installation - $199
• Delivery and wall mount - $249
• TV recycling - $50
• Video game counsel set-up - $99

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Flying into Pearson International Airport offers a view of the GTA that would make even the least excitable solar entrepreneur salivate.

What’s the big deal? In a word: rooftops. Thousands of flat rooftops on hotels, manufacturing plants, warehouses, apartment and office buildings, schools, hospitals and shopping malls. Each is a sunlight sponge with the potential to take the sun’s rays and convert them into emission-free electricity.

In a province prepared to pay richly for solar power, it’s no surprise then that the race is on to lock up leases on prime rooftop real estate across the Greater Toronto Area and the rest of Ontario.

"It’s kind of like a gold rush right now," said Justin Woodward, director of solar development for Toronto-based Greta Energy Inc., which is focusing its efforts on smaller towns outside the GTA.

Greta Energy is one of dozens of emerging ventures that are approaching commercial property owners with an offer that is difficult to refuse.

Give them 20-year access to your building’s unused rooftop and they’ll kindly compensate you for the space – similar to how farmers over the years have earned income by allowing wind turbines on their property.

With that secured access, companies will design, build and own the rooftop solar system at no expense or risk to the building owner. They’ll then apply to connect the system to the grid as part of the Ontario Power Authority’s feed-in-tariff program, which for large commercial rooftops pays between 53.9 cents to 71.3 cents per kilowatt-hour and guarantees quick connection to the grid.

Payment to the building owner can come in a number of ways: a percentage of annual electricity revenues from the system, or a fixed price per square-foot of rooftop being used to host the system.

Greta Energy prefers the square-footage approach, which can vary from 10 cents to $1 per square foot but on average lands at about 30 cents. This means a 250-kilowatt system that takes up 40,000 square feet (3,716 metres) of space would result in an annual payment of $12,000 to the building owner.

"The rooftop lease works out to about 10 per cent of (electricity) revenues," said general manager Chris Young of Ottawa-based Enfinity Canada

"At the end of the term the equipment is transitioned to the building owner’s hands so he can benefit from electricity production beyond the 20-year contract."

Alternatively, compensation might be a guarantee to supply solar-sourced electricity over two decades for less than what a building owner currently pays. CarbonFree Technology of Toronto takes this approach.

The market is increasingly becoming crowded, with Ozz Solar, Helios Energy, Rumble Energy and SunOne Energy Canada among a growing list of solar rooftop aggregators knocking on doors.

Woodward said he’s noticed a dramatic change since the Ontario Power Authority announced the province’s new feed-in-tariff program on Sept. 1. He estimated that for every 10 building owners that were cold-called three months ago there would be one that had already been contacted by a competing developer.

"It’s now probably one in four calls," he said. "Right now there are a lot of small players jumping into the market, people who just get business cards made up or foreign companies just cold-calling commercial property owners."

Building owners need to be cautious, said Young, warning that some "lease consultants" are merely accumulating rooftop real estate that can be flipped for a profit.

"If they sign on with someone who is going to flip the project to someone else, that’s money out of the building owner’s pocket," he said. "Property owners should be looking for people who have a strong financial track record and are capable of following through with the project they’ve contracted for."

He said rooftops must also be inspected to ensure they are strong enough to handle the weight of both the panels and winter snow. Enfinity, for example, builds the cost of insurance into its business model to take account of possible damage to a roof.

Ben Chin, a spokesman for the Ontario Power Authority, said it’s important for property owners to do their homework before entering any long-term leasing contract.

"You wouldn’t hire a plumber without experience," said Chin

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In today’s troubled economic climate, almost no residential community is immune to the threat of foreclosure. And a foreclosure can affect more than just a single home. Proactive measures must be taken to ensure the overall vitality of entire neighborhood or residential community.

Many such communities have a homeowners’ association or a board of trustees. They have a fiduciary duty to resolve delinquent association fees.

To that end, the company that manages the association should have in place a collection procedure and an attorney to aid the board in implementing decisions related to any foreclosure. An attorney has the ability to place a lien, allowing the association to attempt to recover delinquent association fees.

Maintaining a foreclosed property’s curb appeal to the community association’s standards is critical to sustaining the real estate value of the other homes in the area. The association’s management company, board members, trustees and homeowners should work together to protect their investments.

To preserve adjacent properties and to protect homeowners’ interests when a residence becomes vacant, community associations should keep utilities on. Continued presence of heat and electrical services prevent pipes from freezing and breaking in cold weather. They also give an empty residence a lived-in look. Also important is keeping the residence free of trash or anything else that might cause odors, attract insects or produce other problems. Neighbors can help by contacting the association’s management at the earliest sign of foreclosure activity.

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A key House committee, culminating months of debate over how to reform bank rules, voted Wednesday in favor of legislation that aims to prevent firms from growing too big and threatening the financial system.

The House Financial Services Committee passed the bill by a margin of 31-27 along strict party lines, with all Democrats voting in favor and all Republicans voting against. The bill, which proponents consider key to preventing the kinds of problems that caused last year’s crisis, will now move to the full House of Representatives for debate and a vote.

Rep. Barney Frank, D-Mass., chairman of the committee, said Wednesday that he believes the full House will consider and vote on the package next week.

The bill would impose stronger supervision of Wall Street and impose tougher capital requirements for banks, while proposing a new way to take over big firms such as American International Group (AIG, Fortune 500). It also includes legislation to regulate derivatives and create a consumer financial protection agency.

But on the Senate side of Capitol Hill, the bill is moving much more slowly and final passage is likely months away.

Also, the bill faces a potential hangup in the House, as the Congressional Black Congress (CBC) on Wednesday announced its displeasure with the lack of support for minority communities in prior financial sector bailout legislation. The CBC said its support for such bills that do not support minority communities, which were hit particularly hard during the recession, "stops today."

"This particular moment provides an opportunity," said Rep. Maxine Waters, D-Calif., a member of the Financial Services Committee and the CBC. "If we’re going to support this bill, which gives regulators extraordinary powers, we have to make sure those powers will benefit small and minority owned businesses as well."

The House bill creates a new kind of unwinding process for big firms, and forces them adhere to stronger supervision mostly by the Federal Reserve working with an oversight council.

Most observers, including those in the financial industry, agree that government officials didn’t have the right tools to properly manage the failures of insurer AIG and investment bank Lehman Brothers.

The bill would also tax big banks to create a $10 billion fund to pay for government takeovers.

One of the most controversial parts of the House bill is a provision to allow the Government Accountability Office to audit Fed activities. Some fear the proposal would interfere with the central bank’s ability to carry out independent monetary policy online payday loans.

Fed Chairman Ben Bernanke, in an opinion piece in the Washington Post, decried the proposal and one in the Senate bill that aims to strip the Fed of its regulatory powers over banks.

"These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States," Bernanke wrote.

House Republicans have generally opposed the "too big to fail" package, because they say it gives government too much power. They would prefer that Congress establish a special bankruptcy process to allow big firms to be liquidated through the court system.

Senate moving slower

The Senate, led by Banking Committee Chairman Chris Dodd, D-Conn, lags the House in trying to reform financial regulation.

Dodd’s bill, only recently unveiled, includes several far-reaching proposals, such as the creation of a super-regulator for all banks — a move the Fed opposes.

Dodd had also said he wants the Senate Banking committee to start working on his bill next week. But myriad objections to the legislation, coming from both Republicans and fellow Democrats on his committee, has pushed the bill into closed-door negotiations that could last a few weeks.

"Barney Frank will get a bill out of committee and through the House, and it will look pretty similar to what he’s been proposing," said Brookings Institution economist Douglas Elliott, a former J.P. Morgan investment banker. "The bigger wild card is the Senate. It’s not clear whether Sen. Dodd has sufficient level of his support for his ideas."

Additionally, the creation of a consumer financial protection agency, already passed by the House committee, could be a deal-breaker for Senate Republicans. The proposed agency would be charged with ensuring that personal financial products, such as mortgages and credit cards, are fair to consumers.

While the new consumer agency is a White House priority, ranking Republicans in the Senate really don’t like it and could filibuster to prevent it from coming to the floor if their demands aren’t met, Elliott said.

– CNNMoney.com staff writer David Goldman contributed to this story 

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Americans are inking a lot of deals to buy homes.

In October the National Association of Realtors recorded an unprecedented ninth consecutive month of increases in the number of signed contracts.

Although these are not closed sales, and some deals can fall through, signed contracts are a good indicator of where the housing market is headed.

Between September and October NAR’s Pending Home Sales Index rose 3.7% to 114.1 from 110 in October. But the index is 31.8% higher than a year ago, when it was 86.6. That’s the biggest year-over-year gain in the history of the index.

The PHSI is also at its highest level since March 2006, and the rise confounded expert expectations. A panel of industry analysts put together by Briefing.com had forecast a 1% drop in new contracts.

NAR’s chief economist, Lawrence Yun, gives much of the credit for increased sales to the homebuyer’s tax credit, which first-time homebuyers could claim to reduce their taxes by up to $8,000.

"The tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future," Yun said in a prepared statement.

The credit had been due to lapse on Dec. 1, so many October buyers may have acted to get in under the wire.

However, the credit has been extended through the middle of 2010 and expanded to include many move-up buyers. The housing industry hopes that will keep sales perking until the economy picks up and markets return to a more normal condition.

In a related story, the Census Bureau reported that private residential construction spending surged 3.9% during October.

Yun cautioned, however, that housing market indicators, such as pending sales, may weaken over the next few months.

"The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months," he said.

"Given the lag time, we could see a temporary decline in closed existing home sales from December until early spring when we get another surge," he added. "But the weak job market remains a major concern and could slow the recovery process."

The good news is that number of homes on the market has declined, removing some of the bloat that has depressed prices. There is now a seven month supply of homes on the market at the current rate of sale. which is down from 10.2 months a year ago. Yun predicted that housing conditions could return to near normal and home prices firm up by mid-2010.

"That would mean broad wealth stabilization for the vast number of middle-class families," he said. 

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