With interest rates lowering, new homes being sold faster than can be built, new homeowners buying great properties for a lower price than in 2008, some real estate markets are looking exceptionally good for buyers.
For a buyer eying to acquire properties here are some bits of advice.
The low interest rates seem like they will stick around for awhile. More mortgage-backed securities and bonds will be purchased, according to the Federal Reserve. Currently, Fed is buying about $45 billion a month, which, in other words means that interest rates could get even lower. Keeping the interest rates low is a strategy to attract people into the real estate market again.
Despite the fact that in some areas there have been reports of bidding wars, it is the understanding of some buyers that the market is somewhat unrealistically high. Those are the ones hoping for even lower prices. This buyer wait causes more stress for sellers who are in a precarious position of potentially missing a mortgage payment on an already "underwater" home.
On the rise are home modifications and short sales. Banks and mortgage servicers are realizing it's better to work things out together than foreclose. Government laws are also helping homeowners in crisis. The law that allows tax relief for mortgage debt forgiveness (from homes that fell victim to short sales, foreclosures, or "phantom" income on loan modifications) has been extended another year. Meanwhile banks are still taking a hit from the government. It's expected that billions of dollars of fines, fees, and settlements are still coming. Financial practices are being scrutinized and a federal watchdog group created in 2010 is ensuring legal financial practices are used.
Trouble for some is success for others. Right now, the temptation is great for buyers interested in some deep discounts. According to RealtyTrac, the online entity that tracks foreclosed properties, homes sold in foreclosure nationwide were, on average, 39 percent lower than conventional sale prices during the fourth quarter. Some markets offered even greater discounts on home prices. Short sales also offered a good price for buyers, averaging 23 percent below market.