In most parts of the country, the New Year will dawn on a housing market that is shockingly different from just a year ago. Overzealous speculation, too lenient lending and aggressive overbuilding have combined to create the type of home inventory levels and price stagnations that haven not been felt in the U.S. since the early to mid-1990s.

In short, the housing market, after a historic run-up in prices, is correcting. While that is of little concession to current and would-be sellers, it is not the end of the world either, especially if you don not need to sell immediately. Economics elsewhere are encouraging. Recession doesn not appear imminent. Wall Street appears healthy. Unemployment is low, and the general economy is good.

The market, as it always does, will reach equilibrium again, though probably not before mid-2008 or so, most economists estimate. So reset that panic button and sit back to raise a glass to 2007 as a transition year that will bring us one step closer to healthier home sales. In the meantime, take note of how home buying and home selling strategies change in a down market.

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