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Denise Acampa, 54 and divorced, knows precisely what to do when she buys her Boston condominium. She will try a different North End restaurant every week, meet her girlfriends for cosmopolitans, and frequent the theater.

With her youngest child nearing graduation at Harvard College, Acampa is gung-ho about recapturing a lifestyle relinquished in 1982 for a husband, two children, cats, and a 42-foot swimming pool in her back yard. “When the kids come along, you live at soccer fields and baseball diamonds,” said Acampa, who paid $35,000 last spring to reserve a corner loft in the Broadluxe condo project downtown. “Now my activities are going back to the city.”

One thing stands in the way of her empty nester’s dream: a three-bedroom house in Saugus on the market since August.

Many empty nesters, the aging baby boomers whose kids are grown and out of the house, are being forced to wait for a real estate market upturn, deferring dreams of abandoning the lawnmower and suburban serenity for condo life, agents and developers said. Falling sales of single-families in Massachusetts — September sales were 24 percent below a year earlier — have produced a glut of houses for sale, enough to last 13 months. The resulting 5.3 percent price decline has been magnified by a demographic bulge of baby boomers trying to sell the family home and downsize.

“There’s a lot of reevaluation going on,” said Mark Lippolt, executive vice president of Coldwell Banker Residential Brokerage, one of the state’s biggest agencies. “The reason is a slowdown in the market.”

There is panic in the real estate market. Millions of common people bought condos after condos, homes and homes with a hope to flip and make some quick bucks or just use the same as an income generation means. There were thousands of those real estate scams teaching common people how to buy homes for no down payment and then make millions out of that. The slogan was ‘If I could make millions, you can do it’. Some said ‘I will teach you how to make it happen’. Common people from the main street bought real estate after losing their shirt in the 2000 –2003 stock market route with no money down and interest only loan – even with negative amortization.

Anything that bubbles like that always falls flat and that crashing flat stays there for decades. Gold and Silver are ideal examples. The bubble in Silver gave rise to a severe bear market and then it took fifteen years for silver to build base at $5 level before coming back to a level where it should be.

Where can the residential real estate market go from here? We look to an analytic model that is based on advanced time series forecasting and stochastic dynamic programming. The real estate boom continued for a staggering seventy years. The real bear cycle down has just started. The bear market can easily stretch to thirty or forty years. After a sharp fall in prices – about 40 % on the average. The market will go sideways losing value in relation to inflation.

If real deflation hits the economy, the housing market will continue to falter and continue to go down. The biggest problem on the housing market is the pyramid effect. People have taken equities out from an existing home and bought many other homes. Then they have taken equity out from those homes to buy more homes

Area homebuilders are looking forward to closing the books on 2006, which saw the biggest downturn in their industry in more than 15 years.

Through the end of October, the number of new home building permits issued in Allen County was off 37 percent from the same period in 2005.

Rob Wacker, president of the Home Builders Association of Fort Wayne and vice president of operations at Windsor Homes, said it’s the biggest drop he has seen since 1990.

The good news is the slump already may have reversed, he said.

“Sixty days ago, I would have said it wouldn’t happen until the first quarter, but our traffic since then has been strong and sales have been good,” Wacker said.

“July and August were particularly sluggish, but then in September it turned around,” agreed Lonnie Norris, vice president of Granite Ridge Builders by Tony Reincke.

For the first 10 months of last year, 1,504 new home permits, with a total value of $281.3 million, were issued in Allen County. For 2006, just 948 permits were issued, with a total value of $182.3 million.

Norris said his company’s permit numbers are down about 20 percent for the year, but the average price of homes built is up $20,000.

The feeble U.S. housing market showed more frailty in October when home sales plummeted in 38 states, hitting Nevada, Arizona, Florida and California particularly hard, government data showed on Monday.

The once-booming real estate market’s persistent weakness over the past year has reined in expectations for economic growth but hasn’t been severe enough to offset a rising stock market, lower gas prices and improved consumer expectations.

The National Association of Realtors reported Monday that sales of existing homes fell in 38 states during the summer. Sales retreated to a seasonally adjusted annual rate of 6.27 million units nationwide, down by 12.7 percent from the same period a year ago. Nevada, Arizona, Florida and California led the declines.

Like many other California renters in early 2005, Nick Basile and his fiancée, Jackie Neuffer, felt the pressure of ballooning home prices.The couple, fresh out of college, decided to act. They snapped up a house last summer in the San Joaquin Valley town of Visalia where prices had already spiked 40 percent in the prior 12 months.

Nick Basile and Jackie Neuffer

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“We figured we better buy before things really got out of control,” says Basile.

They focused on buying a new house and found a model near Fresno that they liked. The price though, at $305,000, was too high.

Fast forward a few weeks. They discovered the builder was developing a community in Visalia, 35 minutes south of Fresno, where they already worked as environmental consultants. There was a model home with a similar style to the Fresno house, but the going rate was even higher, at $310,000.

Meanwhile, the Fresno home had shot up to nearly $400,000. That kind of action can make even a strong home buyer’s knees buckle.

“We decided it was now or never,” says Basile.

The Visalia homes were being sold in a lottery process. “It was unreal,” says Basile. “There were 50 families packed into a model home. We were shaking.”

The last name drawn, theirs, gave them the right to buy a home. The remaining model wasn’t their first or second choice, and was priced a little higher than they wanted, but they got caught up in the home-buying fever. “Jackie was shouting, ‘Shut up! I can’t believe it,’” says Basile.

They felt lucky. Some of the other buyers had to attend four or five drawings before they were picked. As those unlucky bidders bided their time, the prices kept rising; Basile and Neuffer now have neighbors who bought a few months later and paid nearly $100,000 more.

The couple ended up spending $329,000, which they financed with an interest-only ARM with a home loan for the down payment. They knew their salaries would cover the monthly payments and they reasoned that if they ever got in trouble they could always sell - at a profit.

What they didn’t count on was that they soon began to miss their native East Coast. This past summer they decided to move back and they put the Visalia house on the market in August.

At first they took the for-sale-by-owner route, paying a flat fee to list on the local multiple listing service and handling all the other aspects of the sale themselves. They first priced the house, a three-bed, two-bath 2,150 square foot contemporary, for $409,000.

That price drew nothing more than a few chuckles from prospective buyers. One of the main problems was their builder was still churning out these homes and, to move inventory, he was undercutting Basile and Neuffer’s (and every other seller’s) price.

“The builder can’t give away the houses,” says Basile. “He’s selling them for $324,000 with swimming pools, granite counter tops, spas, landscaping - all things we didn’t get.”

Basile and Neuffer are still betting that their house can command a higher price than the builder’s because their home is in a better part of town and a more-in-demand school district.

But they kept dropping the price in $10,000 increments as they only attracted showed two showings in three months. They held an open house and nobody attended the first day and three couples came the second.

Then, a couple of weeks ago, they both got confirmations of job offers back in Saratoga Springs, New York. That added some urgency in their quest. They hired a real estate broker and lowered the price to $364,900, which, even if they get, will probably still leave them with a net loss after commission and other closing costs.

Plus, they’ll be out a total of about $10,000 in prepayment penalties for paying off their mortgage and home equity loan early.

Finally, last week, the agent showed the house four times, telling the couple that two of the buyers expressed interest. They’re keeping their fingers crossed because they can’t afford to keep up two households and don’t want to be long-distance landlords.

Even if they rented the place, the numbers wouldn’t add up. “Our payment is about $1,700 and we could only get about $1,500 for it,” says Basile.

That doesn’t even take into account property management fees, taxes, lawn service and other expenses. They’d be awash in red ink every month.

Now, if their agent doesn’t come through, they’re considering trying to find a friend to rent it on a short-term basis and then put it back on the market during the spring selling season.

In the meantime they’ll head to Saratoga Springs, which has not experienced the big price swings California markets have gone through and where the housing dollar stretches a bit further.

The ordeal may have made them a little more real estate savvy - and gun shy -but they seem remarkably serene. Basile is not exactly kicking himself.

We all know where residential real estate is now. Huge percentages of buyers begin their home searches online and sign up to receive automatic e-mails when a house matching their criteria comes to market. The big offices spend megabucks on their sites and reap hundreds of customer leads each day. There probably is not a single agent in the country without an email address and those without their own URL are few and far between. Zillow has married the web to satellite technology and Redfin is striving to make agents on the ground a relic as they pioneer what amounts to phoning in home showings and remote control offers.

Still, it is a people-to-people business and many of the top producers have resisted technology and survived quite nicely thank you. Now among the recent innovations is one that marries the personal with the technical, real estate blogs. This should come as no surprise as there are now, according to Technorati some 55 million blogs world wide and the mainstream media is beginning to treat them as a legitimate information source. The National Association of Realtors® devoted part of the program at its 2006 conference and Expo last week to the subject, inviting a panel of leading proponents of real estate blogs to speak to the subject.

Blogs, in the unlikely event you don’t know, are interactive websites where the owner suggests a topic and invites readers to comment. Blogs tend to center around a special interest - politics, pets, knitting, and thousands of other topics. Sociologists are billing them as a way to build communities and that is, in part, the direction that real estate blogs are taking.

As a marketing tactic the first priority of a blog should be to build brand identity. An agent or an office should attempt to project a personality through the blog and building community is one path to that end. An agent who is an avid golfer or one who represents golf centered developments could blend features on new golf products, tournaments or up and coming local talent with information on his real estate listings, using information to draw in the reader who will then become acquainted with the agent and perhaps add to the conversation with information or opinions of his own. That reader will then hopefully talk about the blog and the sponsoring agent in the locker room of the local club, even if only to encourage his friends read his own contribution to the site.

An agent might build a blog completely around his readers’ interest in real estate, i.e., “Talk among yourself, I will give you a topic: ‘Has the bubble burst in Des Moines?’” Everyone loves to give an opinion; to see it in print is a real plus, and blogs can be almost destructively addictive. Once a comment is posted, the author is compelled to return again and again to read any responses. All of this amounts to a lot of traffic to an agent’s web site and probably a lot of buzz from bloggers to their friends.

Some housing bubble news from Wall Street and Washington. Origination News, “Subprime lender ECC Capital Corp., Irvine, Calif., posted a stunning $54 million loss in the third quarter, citing loan buybacks and early payment defaults. Through the first nine months of the year, the publicly traded nondepository lost almost $80 million.”

“ECC said it is continuing to “experience higher levels of repurchase claims generally relating to early payment defaults.”

“Williams-Sonoma Inc. on Thursday posted lower third-quarter profit and cut its outlook for the fourth quarter due to weak demand for home goods.”

“‘We are increasingly concerned about the ‘home-related’ macro-economic environment, as well as the competitive landscape,’ CEO Howard Lester said.”

From CNN Money. “Economists think it’s looking more and more likely that the Federal Reserve will hold interest rates steady for quite a while, maybe through all of next year. So investors hoping for a rate cut in 2007 may need to kiss that wish goodbye.”

“‘There’s no reason to assume that inflation pressures will come down quickly so it’s very unlikely the Fed will ease anytime soon,’ economist Chris Probyn said.”

From Bloomberg. “Central bankers and finance ministers from the world’s 20 largest economies may say inflation risks have increased amid the fastest global economic expansion in decades, raising the specter of higher interest rates.”

“‘They’re more concerned about inflation than growth,’ said Jean-Michel Six, chief European economist at Standard & Poor’s. ‘There will be more hikes from the European Central Bank and the Bank of Japan. The Federal Reserve will pause, but it won’t cut rates until the second half’ of 2007.”

From Reuters. “The conforming loan limit for mortgage finance giants Fannie Mae and Freddie Mac will be frozen for a year if national home prices decline in 2006, the Office of Federal Housing Enterprise Oversight said.”