When it costs more to buy a mozzarella and proscuitto sandwich than to buy a condo, something has to change. Perhaps the best news in recent days about the real estate market is that the sub prime lenders have taken such a beating in the stock market that they have been forced to or decided to stop 100% no doc loans w/sellers concessions. Let me detail a recent transaction that illustrates why something had to change. In this transaction, the buyers entered into a contract to buy a house for $600,000 with 5% down. This was accepted by the seller. During the course of the transaction the buyers in fact applied for and were approved for 100% financing with a sellers concession of $15,000. So to allow this to occur the realtors re-drafted the contract for $615,000 (which included the sellers concession). At the closing, the buyer’s cost to close was $15,007. In other words, the buyers purchased a $600,000 house with $7 out of their pocket. This cannot be healthy for the market and the fact that without government intervention, the market place is correcting itself; it shows how dynamic and strong the underlining market is. In a balloon market, there would be no self-correction before the burst.