In September, my wife and I were aggressively looking for a home to buy. Thankfully, nothing worked out, and we renewed our lease for six months.

I say “thankfully” because home prices in my area now seem to be dropping faster. Example: On the front page of my community paper’s classifieds, there is a home listed for sale for $400,000. If that sounds like a lot, it is. But get this. It sold in 2007 for $543,000!

Which means the price of this home will have dropped at least $143,000 by the time it sells. That is a 26% reduction in price, minimum.

What’s equally crazy is that the house is 4,000 square feet on 1 acre of land. So it’s currently priced at $100 a square foot in an area where prices are normally in the $140-$170 per square foot range.

(Can you tell I’m interested in this house?)

Anyway, I think we will see more cases like this. Big price drops. Desperate sellers. Banks and builders competing with home owners to get buyers. Etc.

Don’t know if I’ll be able to buy in the spring of 2009 or not. But I’ll certainly be doing whatever I can to be in a solid buying position by then.