"W Effect"?

The residential real estate economy saw double digit increases in the numbers of home sales with positive increases over the past 16 months.

Now, the market is heading into a normal seasonal slow-down as many people think about Thanksgiving and then Christmas and the holiday season.

There are concerns that the real estate market will experience a "W effect", so named after the behavior the economy exibited during the Great Depression:
1) fall
2) cautious recovery
3) retraction in lending which led to another fall
4) another cautious recovery

The residential real estate market has experienced a recovery spurred by record low interest rates and government tax incentives for 1st time homebuyers.
Now, lending has contracted somewhat due to 10% unemployment rates, high debt-to-income levels and/or reduced credit scores.

The federal government recognized the delicate balance the economy is in and passed an extension of the housing credits for homes closing on/before 6/30/2010. This should keep the recovery going but only time will tell.