That conclusion is based on foreclosures doubling to 1.3 million last year and the number of vacant homes for sale shooting up to 1.12 million.

What does the "housing crisis" mean to home owners and real estate investors? It means we all better pay attention to what is happening with banks and mortgage lenders.

Most U.S. banks have made it harder for creditworthy borrowers to obtain a mortgage. They have tightened their lending standards on prime mortgages. When mortgage money is scarce or it becomes hard to qualify for a real estate loan it makes dramatic changes to the real estate game.

Here is an example of lender Loan to Value (LTV) limits for investment properties:

* Full doc purchase or rate and term refinance

Up to 90% LTV on 1 to 2 unit properties

Up to 75% LTV on 3 to 4 unit properties

* Full doc cash out refinance

Up to 90% LTV on 1 to 2 unit properties

Up to 75% LTV on 3 to 4 unit properties

* Stated income purchase or rate and term refinance

Up to 90% LTV on 1 to 2 unit properties

Up to 75% LTV on 3 to 4 unit properties

LTV limits vary from lender to lender, of course, and they change regularly. Stated income loans seem to have been suspended by most lenders.

Credit Score Requirements

FICO scoring system runs from 300 to 850. A score below 620 will normally disqualify a person from qualifying for a mortgage loan, while anything above 800 makes you a solid gold borrower.

Did you know that each 40 points in a FICO score cuts the lender's risk of a loan default in half. That 20 points significant. It works like this, someone with a 700 credit score is twice as likely to default as someone with a 740 credit score.

Is there a housing crisis? Only if you are a buyer, seller or lender.

Buying a home can be tough. Mortgage insurers require higher credit scores and bigger down payments than they did a month or two ago. Because of tightened lending standards mortgage brokers and loan officers are issuing fewer approvals. That means the earnings of mortgage lenders will be falling along with the price of their stock.

Most buyers can still get home loans, but some find themselves pushed out of the private mortgage insurance market. That means they must have more down payment cash or get mortgage insurance through the Federal Housing Administration. That often entails having to switch mortgage brokers, because many don't have FHA certification.

The mortgage rate has generally been above 6 percent for all of 2008. In June, comments by the Fed about the dangers of inflation caused mortgage rates to spike up to between 6.3 percent and 6.5 percent.

Sellers have to face the fact that there are over 1 million vacant homes waiting for buyers. Drop your price and get creative or forget about selling.

Is the Housing Market Crisis Almost Over?

That Harvard report goes on to say that historically housing markets recover only after the economy has entered a recession and a combination of failing mortgage interest rates and house prices have improved housing affordability.

Because of the unusually high levels of foreclosures, and constrained credit markets it will take longer this for the real estate market and economy to rebound.

Home Values are a Moving Target

It's easy to be fooled when you look at a property that is now being offered at "30% below market value". That sounds tempting until it registers that the 30% discount is based on the value of the property at the very top of the real estate bubble. Real estate values are still in a downward trend.

To buy today means the property will probably worth less tomorrow. How much of a discount do you need to make buying today a prudent investment?

You will only recognize the bottom after it has passed, so be very cautious about any real estate investment you are considering today.