In some of the worst housing markets in the country, deflation has reached double-digit proportions. While housing woes have reached around the country, California appears to be poised to rank among the worse. One of the primary reasons for this is the fact that in the last several months California has experienced the largest rate of deflating home prices. In fact, home prices in California have fallen at levels that have been unprecedented.

Miami, Florida is proving to be a very difficult market also. A weak mortgage market and record high foreclosures have led to a fall in home prices as well. Over the past 2 years, Miami has had one of the worst housing markets in the country. The high flying condo boom of just a few years ago has added to the problems of the current massive real estate bust.

While Florida and California may have been easy to predict as being among the first housing markets to crumble when the real estate market crashed, there are other markets that are on the precipice of falling which have not been as easy to predict. One of the primary reasons that Florida and California were poised to fall so rapidly were rapidly escalating home values during the boom a few years ago.

There are other markets where prices did not increase as much or as quickly, which could be one reason why they were not at the top of everyone's list - until now. Markets now turning into real bears are Massachusetts, Nevada, Indiana and Arizona. Decreasing house values as well as a significant number of foreclosures in these areas are adding to their worsening real estate woes.

Problems are expected to grow worse in many markets as several million adjustable rate mortgages are scheduled to be reset in the coming months. As these mortgages are reset, it is logical to assume that even more homeowners will find themselves facing the reality of being unable to pay their monthly mortgage payments in certain markets. When that happens they will be forced to either face foreclosure or in some cases make a short sell on their home as refinancing is becoming less and less of an option for many homeowners.

According to most statistics, the remainder of 2008 is still poised for problems in the housing market. Many statistics indicate that home values could continue to drop and new homes could experience a loss of up to 18% before the year is out. While there are some indications that the market could begin to level off at the end of 2008 or the beginning of 2009, many experts are quick to warn that when the market does begin to rebound it will not reach the point where it left off. In comparison to the housing peak of 2005, the rebounded market could still be quite a bit lower. Part of the reason for this is that in many areas, prices escalated so quickly that there is simply no way for prices to rebound back to that point.

There are a few bright spots for select areas. In many markets most of the problem sub-prime mortgages have been eliminated through foreclosures or quick sales, leaving only solid mortgage owners and a more reliable market. Also, the stimulus package is anticipated to help the housing market.

First-time home buyers may soon find the relief they have been seeking since they were forced out of the market, however, it may longer before homeowners begin to experience that same kind of recovery. This is because most homeowners are still reluctant to sell and lose the equity they once had in their homes. The simple fact is that many homeowners have yet to accept the fact that they can no longer get the same prices for that was possible just a few short years ago.

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