LIA Chief Economist Pearl Kamer has a grim forecast for the Long Island housing market as a result of the failure of the proposed $700 billion bailout plan.

"The housing market on Long Island can only go down," says Kamer. "We don't know where the bottom is."

The House voted down the proposal 228-205 Monday. The Dow plunged nearly 800 points at closing, the largest one-point drop ever, as fear swept the financial market.

Many had been optimistic the bailout would provide a booster shot for the struggling housing market.

"I think foreclosures will accelerate, it means you'll have abandoned homes in neighborhoods which will cause general neighborhood deterioration," says Kamer. "The whole situation can actually become catastrophic."