Despite a year of government effort, the recovery in the housing market that many pundits have convinced themselves is here appears to be stalling. It’s true that for a short while home sales rose, but as many predicted that was simply buyers getting in ahead of the expiration of the temporary government tax credit. To be eligible, buyers had to be in contract by April 30th and closed by June 30th. Once that deadline passed, sales went back into the doldrums. So the government extended the deadline. Sure enough, as the new deadline approached sales climbed again. But once again the boost appears to be only temporary. As a result, home prices have now fallen consistently for the past six months.

The government has tried everything it could think up to help. Obama hoped to prevent defaults with a plan designed to encourage banks to refinance the mortgages of those unable to pay. The Fed held down mortgage rates by buying up mortgage-backed securities. And Congress offered that enticing tax credit to qualifying buyers.

But even taken all together, these initiatives have not made any lasting inroads—in part because they can’t get to the real root of the problem, namely that affordability is no longer the driving factor behind many foreclosures. The problem now is negative equity. Everyone thought the typical individual most in need of help was the homeowner deeply underwater on his mortgage (owing far more than the house is worth in this market) and who then, say, loses his job. However that’s less and less frequently the case. Now we see a growing number of underwater borrowers who are merely making a practical business decision. They are simply walking away from mortgages that they can in fact afford, but that is on property they can’t see ever selling at anything but a huge loss. On top of that, banks are balking at rewriting mortgages, despite incentives to do so since too often borrowers default later on anyway. A nationwide spike in home sales would help reverse all this, but those tax credits seem to have done little more than move sales around—speeding up sales that would have happened anyway.

So the market stays becalmed. The steady drumbeat of foreclosures continues as the glut of available homes grows. By some estimates, it will take more than eight years of steady sales to clear the backlog of houses already held by banks, even if no more homeowners default. This overhead holds down prices, which in turn makes it that much harder for the homeowner with negative equity to “climb out” of it.

There are plenty of scapegoats—this administration, the previous administration, lax financial oversight, lenders too willing to lend and buyers too willing to borrow. But looking backward won’t get us anywhere. Historically, sustained housing recoveries are far more dependent on job growth than on anything else including interest rates, widely thought to be some kind of silver bullet. So disappointing jobs figures will always equal bad news for the housing market.

So will we stagger ahead with fitful progress, or slip back into the dreaded “double dip” recession? The answer lies in the jobs numbers. Keep a close eye on them. If millions of Americans continue to remain out of work, a turnaround could be a long time coming.

Dylan Taft is a tech savvy Ulster County, New York real estate professional, working with a small but, dedicated staff. Visit Dylan’s professionally optimized website for more information on the latest property marketing strategies, and details on the Ulster County real estate area.

According to Peter Niederman, who is the CEO of Kentwod Real Estate in Denver, it appears as if million dollar homes are faring quite well in the Denver Market.

“While our overall showing for all price points were down 10.1 percent in June, compared with June 2009, our million dollar-plus showings were up 8.2 percent,” said Niederman in a recent Inside Real Estate News article.

This observation is quite important to note, as this data gives a clearer idea of where the market is headed rather than focusing on where the market has been, as is the case with the Case-Shiller report that was recently released.

“I like the Case-Shiller report and I am happy that they compile it, but it looks backwards, and I’m interested in looking forward,” continued Niederman. “Traffic through homes is a leading indicator and one we are following closely.”

To that end, Carol Ihli, who is the co-managing broker at Kentwood, took a look at the showings that took place during the month of June. She found that there were 422 showings of houses priced at the $1 million or higher mark, which is far more than the 390 showings that took place in June of last year. Interestingly, she also found that 38% of these showings were in Cherry Hills Village, which is where some of the area’s most expensive homes are located. In keeping with these findings, previous reports also indicated that more six-figure homes were sold in June of this year than during the same time period in 2009.

So, just why are luxury homes seeing so much action? While there is no definite answer to this question, it is likely that many buyers are seeking out the bargains that the struggling economy has provided. After all, sellers are far more realistic today than they were during the boom days of the past.

“I think sellers are much more likely to be realistic of what they can sell their homes for in today’s market,” said Niederman. “ I think last year, they were holding on to unrealistic prices, while now they are willing to meet the market.”

Another reason for the growing interest may be the fact that there is now more money available for so-called jumbo loans, which are also available at much lower rates than last year. In fact, qualified buyers can now snatch up these loans with a 5 percent rate as opposed to the 6.125 percent rate they were facing last year. When applied to a million dollar mortgage, this rate difference translates to a savings of about $720 per month. Assuming the buyer hangs onto the home for the typical seven years, that is a savings of over $60,000 during that time frame.

“That provides a real incentive for someone to buy,” said Niederman. “And that is $60,000 that is tax free. If you were thinking of buying a home in the next year or two, and you can afford it, it probably makes sense to buy now to take advantage of depressed home prices and low rates.”