The negative drumbeat continues in the national press. Two major pieces of bad news today. First S&P announced that it may downgrade $12 billion of securities backed by sub-prime mortgages

S&P said it was taking action because losses on the mortgages underlying these securities have risen more than expected and now exceed anything that happened before.Losses will probably increase as the U.S. housing market — especially parts financed with subprime loans — continues to decline before it improves, S&P said. Property values will decline 8% on average between 2006 and 2008 and that will exacerbate losses on subprime RMBS, the agency explained.

The question then becomes how severely will this action impact the ability of many to get mortgages? For Maui, the impact of this should largely be outside of the major resorts.

The homebuilder DR Horton and Home Depot both gave earnings warnings. From DR

"We expect the housing environment to remain challenging," Chairman Donald R. Horton said. During the quarter ended June 30, market conditions for new-home sales declined "as inventory levels of both new and existing homes remained high," the chairman said.

From Home Depot

"We look at the overall market and say there's still correction that lies ahead of us," Chief Executive Frank Blake, referring to the housing market, told investors hours after Home Depot gave the lowered guidance. "But again, we're pretty far along in the correction process."

The biggest issue Maui property owners face in considering selling or pricing their property correctly is determining the impact of this constant negativity coming out of the housing sector, its emphasis in the press and its influencing of the mindset of buyers.