Like houses selling for pennies on the dollar...
Take a look here to understand.
Think of it this way: there may be as many as seven million real estate units that will be foreclosed on. Seven million.
Given the results of recent auctions, these will go for a pittance: the problem is not so much that the real estate units are worth so little, but rather that current prospective buyers do not believe that these units are worth anything more.
Given the opportunity to buy real estate - houses, land, commercial units - at a major discount (like 33 cents on the last low market offer dollar), no one is buying.
Units are going unsold.
What does this mean?
That there is no return.
How can there be no return?
Because the professionals in the business see no way that prices, for at least some types of real estate, will recover at any foreseeable point in the future.
To coin a phase: yikes.
Putting real estate up for auction is like putting something up on eBay with a starting bid of 1 cent.
There are eBay auctions that work wonderfully, with buyers receiving what they want and sellers getting what they want, everyone is happy. It is, basically, the market personified.
I collect watches. One of my small obsessions. I've been recently collecting watches with Hamilton 770 movements, a rather obscure thing to do, given that this was last manufactured in the 1960s and is a simple movement that was perhaps the finest manual-wind movement manufactured in the United States (the Elgin 760 was the finest automatic, but that's a totally different story...).
I've acquired more than a few of them - in fact all - via eBay. This is a movement that was, back then, compared to Patek Philippe, perhaps the finest watchmaker ever. Hamilton was called, back then, the American Patek.
These watches, which sold (in real 2005 dollars) for a couple of thousand of dollars, can be bought nowadays for just a couple of hundred.
Because they're a forgotten movement and are no longer in demand. They once were: Hamilton sold a lot of these watches to companies who gave them to long-term employees, and several that I have are thus engraved.
Prices on eBay are market prices: very few people know how good they are, and even fewer bid for them.
The prices in that link above are market prices as well: they are auction prices, reflecting exactly what something is worth.
Pay attention to auction prices for real estate as this story unfolds: only when these prices pick up is there serious hope that real estate prices will recover.
For until then there is no reason for them to do so...