The flurry of announcements by the government and major banks that they are engaging in a massive campaign to modify mortgages that are in or are hurtling toward default and foreclosure will certainly give rise to predictions that the housing market has been stabilized and disaster averted. If only it were so.

Make no mistake, policymakers and banking executives had to launch this concerted campaign to try to stop the wave after wave of foreclosures that seems to feed on itself. As lenders foreclose on one delinquent borrower, and then sell the home at what is invariably a steep discount, that just pushes a number of nearby homeowners so far underwater that they just move out and mail their keys in, which just sets the cycle in motion again.

But anyone hoping that this synchronized effort to modify millions mortgages that are in trouble is likely to be disappointed. Because behind the splashy headlines, there are limits to what the government and banks can hope to achieve. And trying to slow the free-fall in housing markets is akin to the government trying to put its finger in the dike.

The fact is that despite the double-digit declines in housing values in most cities, housing remains significantly overvalued in many markets by all of the traditional benchmarks: One key ratio – the median cost of a new home vs. median income – suggests that home prices nationwide still need to drop another 15% to 20% on average, as you can see in this chart compiled by money manager Barry Ritholtz. And the equilibrium price is far more than that in bubble markets like southern California and Florida. According to this "fair value" calculator, one suburban neighborhood outside Washington, D.C. that I checked (Alexandria, Va., where I lived in the mid-1990s) is now 47% overvalued. Ditto for a few communities in Los Angeles that I surveyed.

CB Richard Ellis arranged more than 80,000 square feet of retail and garage leases at the Manhattan House on behalf of O’Connor Capital Partners.

ING Clarion Partners L.L.C., the North American investment management division of ING Real Estate, has leased 62,000 square feet at Metropolitan Center to travel retailer Hudson Group.

For years, bad loans and their aftershocks have been sending homeowners into foreclosure. Now its lost jobs that are putting troubled borrowers over the edge.

There was a great story in the Los Angeles Times yesterday about the reporter's strugles to buy a home in foreclosure. I was particularly fascinated by what appears to be some creepy dealings by the listing agent on one of the properties who never even showed the reporter's offer to the bank.

I've been poking around on my own, looking to buy bank-owned property in a Los Angeles neighborhood called Canoga Park. It's a frustrating experience no doubt. I had a close encounter with a wild dog sleeping underneath one house I visited. Fortunately he didn't bite. I've seen homes where flippers left unfinished bathrooms. I saw several houses with paint splashes on the walls, put there by owners who never even had a chance to finish painting.

Another home had perhaps fifty business cards from various real estate agents, scattered across the kitchen counter like coins in a wishing well. One Realtor told me he doesn't even bother going to visit houses anymore. "There are 6,000 houses for sale in the San Fernando Valley," he said. "I'd never have time to see them all."

The last house I went to look at was listed as bank-owned in the Multiple Listing Service and had pictures attached of a nice, empty home. When I got there the home was occupied and the hastily scribbled sign outside said "for sale by owner." A half-hour drive for nothing.

New York City’s commercial real estate market isn’t immune to the fallout caused by the economic downturn. Transactions have plummeted 61 percent from the beginning of the year through October, according to data from Real Capital Analytics Inc. In the longer term, however, the outlook for the market remains strong.

I'm not normally one to toot my own horn, but in this case...toot, toot, toot.

My colleages and I were named the world's most powerful property people by Global edge, an online strategy consulting firm based in the U.K.

Global edge says its ranking methodology involved tallying the Google searches for terms such as "real estate blog." Darn, if we didn't beat out Yahoo, MSN, and CNN's real estate sites.

Thanks Global edge. Thanks Hot Property readers! We think you are the truly powerfull people.

Finding the proverbial silver lining in today’s economy gets harder and harder as the markets continue their downward slide and one of the nation’s most successful casinos – the Las Vegas Sands – may be sinking in a financial quicksand.

As if more proof were needed that the lending environment is hammering even top-of-the-line development, project backers in Boston and Philadelphia have acknowledged that the capital markets crisis is forcing them to put some of those cities’ showcase projects on hold.

Ian Brown has rejoined Grubb & Ellis Co.'s Newport Beach office as a senior vice president with the retail group.