Real estate market conditions are the topic of daily conversation. From real estate bloggers to Bloomberg News, everyone is throwing out predictions about how low home prices will be if a double dip hits.
There is no doubt that the housing market has been hit hard. From bank failures to staggering unemployment and historic foreclosure rates to exploding property taxes, no one knows how much more the industry can take.
Conflicting reports are provided every hour. A recent article published in Bloomberg News reports that homes are priced nearly 30 percent below market value with about one-third of homes for sale involved in “some foreclosure distress status.”
The National Association of Realtors reported that home sales increased during the months of April and May, but were down nearly 16 percent in June. New York University (NYU) Stern School of Business says there was a surge in home sales due to Obama’s federal housing tax credit and predicts home sales will continue to fall down for the rest of 2010.
Currently, more than six million homeowners have lost their properties to foreclosure. As unemployment continues to rise and unemployment benefits disappear, mortgage lenders are predicting an additional two million foreclosures by the end of 2010. If these predictions are correct, more than 8 million properties will enter the real estate category. bank-owned real estate.
With an overabundance of foreclosed inventory, there is no doubt that home prices will continue to fall. To compete with the reduced prices of bank-owned homes, homeowners will be forced to further reduce the sales price. Many will walk away with no benefit to the property they have owned for years.
Another factor affecting the real estate market is the drop in property values when there are multiple foreclosed homes within a community. Remaining homeowners lose home equity, which may prevent them from refinancing mortgages for reduced interest rates or lower monthly payments.
After the banking collapse, mortgage lenders tightened lending criteria; making it considerably more difficult for borrowers to qualify for home loans or mortgage refinances. Lenders cannot afford to take on additional delinquent loans that could lead to foreclosure.
While there is a lot of prophetic speculation about the future of the real estate market, there are still opportunities to buy a house with bad credit; find great deals as a first time homebuyer; or locate discount investment properties. The abundance of bank-owned real estate has opened the door for buyers to acquire homes well below current market value.
Home Path Mortgage offers a wide variety of Fannie Mae bank-owned properties. Prices range from less than $5,000 to more than $5 million and consist of residential and commercial real estate as well as vacant land.
Special financing terms are offered through several lenders that participate in the Fannie Mae Home Path program. Buyers can get low down payment requirements; down payment assistance; flexible mortgage terms; and bad credit financing options not offered through conventional home financing service providers.
The Department of Housing and Urban Development offers homebuyers the opportunity to earn grant money when purchasing homes in areas heavily affected by foreclosures. The Neighborhood Stabilization Program offers financial grants to individuals and real estate investors interested in purchasing homes to revitalize communities.
It’s important to stay on top of housing market trends and financing options for home purchases. Track home prices through organizations like Realtor.com or Zillow.com. Join real estate clubs or participate in investment forums to network with real estate agents, mortgage brokers, and investors.
Paying attention to market trends can help individual buyers and investors locate distressed properties at discounted prices and stay informed about government tax credits and home purchase programs.