The nation’s economy, driven mostly by the real estate sector, has been flying at Mach 1 in clear blue skies for a number of years. Now, however, some clouds are starting to appear on the horizon, and as air currents are changing, pilots are starting to throttle back and slow things down a bit, and distressed homeowners are belted into their seats as they find themselves in for a more bumpy ride in the foreseeable future.

Whether the on-coming turbulence translates into more foreclosure activity at the national level is uncertain. But in their Q3 2006 report, forecasters at UCLA’s Anderson School of Management are calling for the Federal Reserve to reduce the Federal Funds Rate to 4.5 percent as unemployment rises over the next several quarters and inflation continues its flight pattern above the nation’s comfort level “as the housing market continues to deteriorate.”

Home sales and housing starts, the report estimates, will both drop (12 percent and 26 percent respectively) with home prices declining on a year-over-year basis as the economy heads for a soft landing. But while the economy’s air traffic controllers are first trying to chart new flight plans, the nation’s foreclosure activity is flying high — up 53 percent on a yearly basis — according to the RealtyTrac August 2006 U.S. Foreclosure Market Report.

For investors, real estate agents and potential homebuyers looking to RealtyTrac’s radar screen for answers, we will continue to monitor the trajectory of foreclosures and the economy’s control tower to provide you with the latest flight pattern information that will result in a win-win situation for every passenger involved in the foreclosure process — both buyers and investors looking for good bargains and distressed homeowners looking to avoid losing their house to foreclosure.