Real estate market conditions are the topic of daily conversation. From real estate bloggers to Bloomberg News, everyone is throwing out predictions of how low housing prices will go if a double-dip recession occurs.
There is no doubt the real estate market has been dealt severely harsh blows. From bank failures to staggering unemployment and history-making foreclosure rates to exploding property taxes, no one knows how much more the industry can endure.
Conflicting reports are provided on an hourly basis. A recent article published at Bloomberg News reports homes are priced nearly 30-percent below market value with approximately one-third of homes for sale involved in “some state of mortgage distress.”
The National Association of Realtors reported home sales increased during the months of April and May, but declined nearly 16-percent in June. NYU Stern School of Business claims increased home sales occurred from Obama’s federal housing tax credit and predicts housing sales will continue to plummet throughout the remainder of 2010.
Presently, more than six million homeowners have lost their property to foreclosure. As unemployment continues to rise and unemployment benefits disappear, mortgage lenders predict an additional two million foreclosures will occur by the end of 2010. If these predictions are correct, more than 8 million properties will fall into the category of bank owned real estate.
With an overabundance of foreclosed inventory, there is no doubt housing prices will continue to decline. In order to compete with discounted prices of bank owned houses, property owners will be forced to further reduce their asking price. Many will walk away without making any profit on property they have owned for years.
Another factor affecting the real estate market is property values drop when multiple foreclosed homes are present within a community. Remaining homeowners lose accrued home equity which can prevent them from refinancing mortgages to obtain reduced interest rates or lower monthly payment installments.
After the banking meltdown, mortgage lenders tightened lending criteria; making it considerably more difficult for borrowers to qualify for home loans or mortgage refinance. Lenders cannot afford to take on additional non-performing loans which could potentially lead to foreclosure.
While there is plenty of prophetic speculation regarding the future of the real estate market, there are still opportunities to buy a house with poor credit; find great deals as a first time home buyer; or locate discounted investment properties. The abundance of bank owned realty has opened the door for buyers to purchase houses well below current market value.
Home Path Mortgage offers a wide variety of Fannie Mae bank owned properties. Prices range from below $5000 to over $5 million and consist of residential and commercial realty, as well as vacant land.
Special financing terms are offered through various lenders participating in the Fannie Mae Home Path program. Buyers can obtain 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 home buyers the opportunity to obtain grant money when purchasing homes in areas hit hard by foreclosure. The Neighborhood Stabilization Program offers financial grants to individuals and real estate investors interested in buying houses to revitalize communities.
It is important to stay abreast of real estate market trends and home buying finance options. Track housing prices through organizations such as Realtor.com or Zillow.com. Join real estate clubs or participate in investment forums to network with realtors, mortgage brokers and investors.
Paying attention to market trends can help individual buyers and investors locate distressed properties at discounted prices and stay informed of government tax credits and home buying programs.