Tips For Real Estate Agents To Survive The Current Market

Like homeowners, real estate agents are suffering as well. Inventories have continued to rise and as a result many agents are not closing as many transactions as they have in the past. In order to remain competitive, many agents have discovered that they must become quite creative in order to keep their offices open.
As budgets tighten, advertising dollars have become limited and yet agents know they must advertise in order to get beyond the current slump. While print and television advertising can be quite expensive, advertising online remains quite cost effective. In fact, many agents are turning toward blogs in order to offer weekly market advice that is specific to their location. This technique is quite inexpensive and works well to keep local residents apprised of the existing market conditions.
Real estate agents are also recognizing that buyers as well as sellers are more interested in value today than ever before. As the average home price continues to drop, an increasing number of sellers are turning toward the idea of selling their home on their own in order to avoid real estate commissions. To combat this problem, more and more offices are reducing their fees. Other creative efforts can also be quite effective. For example, some agents are springing for the cost to have properties professionally staged or even professionally cleaned.
The current market is definitely challenging; however, it is critical that you take action rather than simply sitting around bemoaning the fact. While making an effort in the existing market will take some effort, it will also set you apart from the competition. One of the ways you can go about doing this is to consider each property separately and think about what you can do to make that property stand out. In battling the current real estate market, you may simply find that you need to fight it out one property at a time. You do not need to spend a lot of money on these efforts; however, there are many things you can do to market your listings in order to increase their exposure.
Consider how much online exposure your listings are currently given. If you do not have much of an online presence at the moment now could be the time to make that change. Statistics indicate that more than 83% of all buyers begin their property search online. If you are going to nab those buyers, you need to be advertising in the same medium in which they are searching or you run the risk of missing out on them.
In addition, it is a good idea to think about what you can do to improve the quality of your advertising. For example, you might give some thought tow hat you can do to improve the quality of your photographs.
Finally, use the time you have on your hands to your advantage. It very well could be that business is out there, you simply need to do some mining to find it. Use the power of your database to unearth warm leads which could provide you with excellent resources for buyers. Set a goal to contact at least 10 people ach week. You just never know where those phone calls may lead you, especially if you provided them with great customer service in the past.

Tips For Investors To Get Through A Real Estate Market Crash

There is little doubt about the fact that a real estate market crash can be frightening for everyone; especially investors. When the market is good, it’s great; however, when it starts to slide it can be more than a little stressful. Many new investors often look to veteran investors and wonder how they are able to make it through the ups and downs of the real estate market year after year and come out relatively unscathed.
The truth of the matter, of course, is that many investors do not come out unscathed. Many become frightened at the first sign that the market may be about to slide and quickly exit before they become burned. The real secret to being a successful real estate investor lies in sticking it out through the bad times as well as the good times.
So, what do you do when the market does experience a downturn? How do you make it through it in order to take advantage of all the benefits when the market finally goes back up again?
First, try to avoid selling in a down market. Suppose the property that you have purchased for investment does go down in value. The best approach is to try to hold onto it until the market returns and your property goes back up in value. This can certainly be frightening and stressful at the time; however, if you examine the cyclical nature of the real estate market you will discover that it always comes back. The amount of time it takes for it to return can vary; however, real estate always bounces back.
One of the most common reasons that many investors sell when the real estate market is in a downturn is that they are afraid the market will worsen. Of course, there is always that possibility. It has to hit the bottom before it can begin the climb back to the top.
Selling during this particular phase of the market is often an emotional decision and one that is frequently not well thought out. There are even some cases in which investors who sell during a down market find they must scramble to come up with the costs necessary to close the deal. Stop and consider for a moment the anatomy of such a decision.
The market has turned down and you are concerned it will get worse before it gets better. So, you sell the property at a price that is far below what you paid for it and perhaps even what you have it mortgaged for. The person who buys the property waits it out and once the market returns, which it will, they are able to take advantage of the great deal they made and ultimately turn a great profit.
Instead of selling, an alternative option would be to hold onto the property and rent it out. Historically, there are always more renters during a down market than buyers. Why? Simply put, when the market is down many first-time homebuyers find they are frozen out of the market because lenders are more conservative and write fewer loans due to more restrictive underwriting guidelines. Since everyone still needs a place to live, many of these people wait out the market by renting. If you do sell during a down market, make sure that it is because you have given it plenty of thought and not because you are reacting to emotion.
Beyond waiting out the market downturn it is also a good idea to make sure that you put aside some cash when possible. When you are already in the middle of a slump that can be difficult to do; however, when the market turns around again make sure that you put aside a little extra money in the event you experience a turn in the market. The extra money can provide you with a cushion until the market settles as well as ensure that when the real estate market does turn around you have options available to you.

Great Tips For Homeowners And Buyers To Protect Themselves

The first signs of the impending real estate crash were noticed in 2005. In 2007, the market began to tumble and since that time literally thousands of brokers and bankers involved in the mortgage industry have gone out of business. Despite the dire conditions of 2007; however, signs indicate that the national market could fare even worse during 2008. Many experts in the industry are specifically concerned that the number of home foreclosures will rise dramatically and commercial real estate will become pinched even worse than in the preceding months.
While this news is certainly disturbing, it is important for homeowners as well as home buyers to understand that there are steps they can take to help protect themselves from the impending real estate crash in 2008.
First, make sure you understand exactly what kind of mortgage loan you have and the implications of your mortgage type. While adjustable rate mortgages were certainly attractive a few years ago because they allowed homeowners the benefit of lower interest rates, today they are a disaster waiting to happen. If you have an adjustable rate mortgage, it is essential that you consider obtaining a fixed rate mortgage.
If you have your house on the market and are experiencing difficulty selling it, as is the case with many sellers, recognize the fact that you may need to make some concessions on the terms and/or the selling price. The real estate market is rife with inventory right now and buyers are able to choose what they want and on their own terms. If you want to be one of the sellers that is successful in selling their home, you will need to lower the price and possibly even toss in a few extras to move your house off the market. If you cannot lower the price, think about whether you might be better off financially to rent the home over the course of the next two to three years.
The impending real estate crash will also most certainly impact prospective buyers as well. While there is a tremendous amount of inventory currently available and prices are lower than they have been in several years, it certainly appears as though there will be even more price reductions throughout the remainder of 2008. In some areas, prices could go drastically lower. This means that if you can wait awhile longer to buy a home you may be able to take advantage of even lower prices.
As a buyer, you also need to make sure you give careful thought and consideration to the type of mortgage loan you take out to ensure you do not become caught up in the real estate crash. If you are a first-time homebuyer and/or you have a credit rating that is less than favorable, it is a good idea to consider taking out a FHA mortgage. If you are a veteran, a VA mortgage is also a good option. Both of these types of mortgage products offer terms that can be more attractive in the current market than other types of mortgage products.
Keep in mind that while there are still numerous ‘no cost’ mortgage loans being advertised, it is imperative that you research such mortgage offers carefully before you try to take advantage of one. In most cases, there is really no such thing as a ‘no cost’ loan. The costs are usually added back into the mortgage and that means you will be paying them off at a greater cost over the term of your loan.

The Mortgage Slump Takes it's Toll On Home Renovations And Home Equity Loans

Back when the housing market was still booming, many homeowners took advantage of the opportunity to renovate their homes. At the time it certainly seemed to make sense. Interest rates were low; loans were usually easy to obtain and homes were selling like hotcakes. Therefore, many homeowners easily made the connection that it was the ideal time to renovate their homes to include higher-end features. These homeowners reasoned that if they decided to sell their homes they would be able to easily recoup the cost of the home improvement.
In most cases, home-equity loans were used to finance these home improvement projects. A home-equity loan is a special type of loan which allows homeowners to take out a form of second mortgage on their home against the equity they have built up in their homes. Due to the fact that home values were skyrocketing in many areas, homeowners suddenly found themselves awash in rapidly rising equity. That, combined with low interest rates, made it quite easy to borrow thousands of dollars to put toward home renovations. In fact, many homeowners found no trouble at all in borrowing up to $100,000 or even more to fund various home improvement projects.
During this time kitchen renovations and upgrades wee particularly popular. Granite countertops became the standard for the day and all high-end homes and even those that bordered on the fringe of being high-end were suddenly being renovated with granite countertops. High-end appliances, especially those produced by Viking, also became quite popular. Homeowners speculated that adding such high-end features to their homes would raise the value even higher.
In many cases, homeowners were able to recoup at least 80% of the cost of those renovations. In other areas, it was not unheard of for homeowners to recoup almost 100% of the cost of the renovation. Taking into consideration a couple of years of use of the renovations and all together, most of these homeowners found it was quite a good deal.
Today; however, the boom has finally ended and many homeowners are finding that those home improvements are more expensive than they ever dared dream. There is suddenly so much inventory on the market from which buyers can choose; however, that they are no longer as impressed with such features as they once were. As a result, even upscale improvements and additions are now recouping less than 70% of their actual cost. There is no doubt that the return for higher-end renovations has certainly declined quite quickly.
This provides critical advice for homeowners who are thinking of renovating their homes in the current real estate market. This message is that if you are planning to renovate your home, you should not go over the top; especially if you think you will be selling in the next three to four years. In most cases you simply will not be able to get the money back when you sell.
You should also take into consideration the fact that home-equity loans for the purpose of renovating homes are not easy to come by as they once were. Just a few years ago it almost seemed as if lenders were begging to give away money. Interest rates were so low, most homeowners felt as though they were being foolish if they did not borrow money against the equity in their homes. Like the rest of the mortgage industry; however, the default rate for home-equity loans has increased sharply. As a direct result, lenders are being far more cautious today about making home-equity loans.

How To Ride Out The Real Estate Market Crash Of 2008

Real estate has been regarded as one of the safest investments for quite some time. Despite the relative safety of real estate investments; however, there remains the possibility that the real estate market can fall like any other investment. Over the long term, real estate still remains relatively safe simply due to the fact that the population of the world continues to increase while land is a limited resource. When there is an occasional downturn in the real estate market, it is important to recognize certain strategies which can be used in order to keep a real estate investment from becoming a complete loss.
The first thought many people have when they realize the market has experienced a downtown is to attempt to sell the property as quickly as possible before the market grows worse. In reality, many investors have found that it is often better if they can manage to hold onto the property and ride out the downtown in the market. While the market might certainly dip lower before it rebounds, historically it always does come back.
By selling the property during a down market, you position yourself to take a certain loss. If you are able to keep the property afloat you stand a much better position of being able to make a profit on it when the real estate market turns back around. Of course, holding onto a property during a down market sounds fine in theory but it can often be much more difficult in practice. One possibility is to rent out the property in order to attain a positive cash flow while you wait for the market to turn around.
In addition, it is important to make sure that all of your account is correct. Many investors find they are not taking full advantage of all the tax benefits offered to them. Consulting a professional tax advisor in order to locate legitimate tax advantages you may have missed could certainly be well worth it financially. You may well find that the write-offs that are available to you could provide the assistance you need to hold onto the property until the market swings back around.
If you find that you are facing a foreclosure on the property, then the best option would obviously be to go ahead and sell it in order to attain as much profit as possible rather than take a complete loss. In this type of drastic situation, the key is to look for ways that you can make the property as valuable as possible. Selling real estate is really not much different than selling any other type of product. In this case, the product is a home or building. If you have had the property on the market for awhile, it is important to look at why it has proven difficult to sell the property. You might consider making some changes in order to make it more desirable.
Ultimately, holding out during a market crash or downtown involves remaining calm and avoiding acting on emotional impulses. Making hasty decisions based on fear will often cause you to take an action you would likely regret once the market turns back around. Before you take any action, make sure you have carefully considered all of the options available to you. By doing so, you may well be able to turn a dip in the market into a big return once the market starts the climb back to the top.

Renters Are Affected By Depressed Housing Market

In some areas renters are also experiencing problems as a result of the housing market crash. This has been quite a surprise for many people because they thought they were immune to the housing crash because they had not taken out a mortgage. At the time, this seemed to be a safe strategy. Many people assumed they were doing the safe thing by waiting to purchase a home until the housing market stabilized.
Many renters in some areas are quickly discovering they are not immune to housing problems after all. One of the most common problems is the fact that while renters do not have a mortgage on their property, their landlords do have a mortgage. If the landlord is not able to make their monthly mortgage payments due to rising interest rates and adjustable rate mortgages, the rental property could very well go into foreclosure.
When that happens, renters could find themselves facing eviction. In some cases, renters have discovered they had only 30 days to leave properties they had rented for quite some time. This has placed a tremendous amount of stress of many renters as they struggle to suddenly not only locate a new place to rent but also to come up with the cash necessary to make rental deposits.
In other cases renters have been affected by rapidly rising rental prices. Nationally, rental prices have begun to rise. Currently, the worse places to rent because of rising rental prices are San Francisco and New York. Seattle, San Jose and Cleveland are also showing signs of rising rental rates. San Bernardino and San Diego are not far behind, either.
One of the reasons that rents are rising in these locations is the fact that developers have not been able to construct as many new apartment buildings. In highly populous areas this has resulted in a large demand with little supply. When supply is not able to keep up with the demand, the natural result is rising prices. To make matters worse, rapidly increasing numbers of former homeowners are either selling their homes as a result of the housing crash or being forced out of their homes due to foreclosures. They must have someplace to go and renting is often the only viable option for these individuals and families, further increasing the demand for rentals.
Overall, the national vacancy rate for rentals has declined more than 10% in the last four years, clearly indicating that more people are renting properties today than they were right before the housing boom of 2005. Nationally, rents have also risen 14% over the same time period, as reported by the Census Bureau.
A number of factors have contributed to the rising rate of rental prices. One of the most important factors that have contributed to rising rental rates is the fact that more and more renters are waiting for the prices of homes to drop before they make the decision to purchase. Many renters are assuming that home prices have not yet hit the bottom. For these renters, it just simply does not make sense to buy right now. Quite simply, most renters do not want to find themselves in the same financial troubles that many homeowners have been subjected to in the last two years.
There is also the fact that even buyers who would be willing to buy right now are simply not able to do so because of difficulty in qualify for affordable mortgages. Following the collapse of the subprime market, many lenders have tightened restrictions and now requesting not only good credit but excellent credit. Requirements for larger down payments have also increased, making it increasingly difficult for first-time home buyers to realize their dreams of home ownership.
The health of the rental market is being eyed with some concern due to the fact that the rental market actually has a strong impact on other sectors. The construction of apartment buildings, for example, is frequently affected by the health of the rental market.

The Real Estate Market Crash Rasies The Divorce Rate

Pick up any newspaper today and you are likely to see at least one article or sidebar discussing the mortgage crisis. While there are still a few markets that have remained relatively untouched by the crash of the subprime market, most areas throughout the country have felt the impact in some way or another. As a result, there are few homeowners that have not felt the pinch of the crash. The ability to move on with life is being greatly impacted by the souring market for many consumers. Divorcing couples, in particular are finding that real estate market problems are preventing them from moving on with their lives.
It is not uncommon for many couples who are divorcing to sell the family home so they can take the proceeds of the home and then go their separate ways. As the number of homes sitting on the market in most areas continue to climb; however, most couples are finding it difficult if not impossible to sell their home. When the home does not sell, this has a direct correlation on the cash flow for the couple. A number of areas are impacted as a result including child support. Quite surprisingly, this problem is even impacting where divorced couples are able to live once the divorce becomes final.
As a result of these problems, there has been a significant rise in a trend known as post-marital cohabitation. While in the past it was practically unheard of for couples to continue to live together following their divorce, many people today are finding they have little choice when they are not able to sell the family home. Quite simply, they cannot afford to live anywhere else until the family home is sold.
As the average sell time for most homes increases, this means that many divorced couples may find they must continue to live together for several months; in some cases a year or more. Older couples who are living on a fixed income are finding this to be a particular problem as are couples with young children. In the case of the latter, the only options they can afford are simply too small for the size of the families.
In situations where couples simply can no longer abide living with another, they find themselves forced to live elsewhere even if it means moving in with family members.
Regardless of the situation, couples in such situations find they have limited options available to them. In situations where the couple is upside down because the value of their home fell after the housing boom ended, they must decide whether it is better to remain in the home until the market improves or try get out with a short sale. Other families are finding themselves facing foreclosure when they simply are no longer able to make mortgage payments.
The arguments over what to do with the family home have escalated to the point that in many cases judges are being put in the middle to sort matters out. This is particularly common in situations where one person wants to remain in the home until the market improves while the other wants to go ahead and sell the home even if it means doing so at a loss. In most situations judges are hesitant to issue orders to sell the home, assuming that the real estate market will eventually rebound.

When Hot Markets Begin To Cool Off

As the housing crunch affects numerous markets around the country, there have been some markets that have been able to blissfully continue with rising home values and rather quick sales. There is some evidence that the housing market crash is finally beginning to penetrate those markets; however. That is certainly the case in cities like Provo, Utah. Even homes that would seem as though they would be rapidly snatched up are sitting on the market with no takers. This has been quite a surprise for homeowners in such markets.
Most homeowners were impacted by the sliding market in 2006. Other markets; however, continued to experience price increases. In Provo, for example, average home prices rose a staggering 14% within a short period of time, compared to preceding home values.
Homeowners in previously hot markets are discovering that they must now resort to creative selling tactics and offering concessions to attempt to move their homes off the market. Just a year ago these homes would have been sold within a matter of weeks. Today these homes are sitting on the market for months at a time. In desperate bids to sell their homes, sellers are slashing prices by thousands of dollars and even offering discounts to buyers who can close quickly or who are willing to work without an agent; providing sellers the opportunity to save on commission fees.
The message is certainly clear. While these markets were once hot, no market is immune to the housing bust. Even markets that are still experiencing price increases are finding that prices are not rising as much as they were in the past. Clearly these markets are beginning to lose steam. In addition, the rapid pace of sales that once marked these areas is beginning to slow down as well. Tighter loan restrictions as a result of the subprime mortgage crisis are likely affecting many of these markets. It is simply difficult to sell homes when buyers are unable to obtain loans.
In most cases, the economy is the one factor that is not affecting these markets. This is certainly the case in Utah, where the economy has managed to remain strong. Despite this fact, the housing market is stalling.
Seattle is another previously red hot market that appears to be stalling as well. While Seattle is certainly still nowhere near the frantic freefall of many other markets, prices are simply not rising as rapidly as they once did. Like many other markets, homes are not selling as quickly as they did last year either. Foreclosure rates have also begun to increase in Seattle in the last few months.
Despite this fact, experts are quick to point out that Seattle should be able to miss the collapse that has affected many other markets throughout the country. The apartment market in Seattle, in particular, looks as though it will continue to remain strong in Seattle even while home prices begin to settle somewhere closer to reality. Overall, inventory amounts are higher than they were last year; however, sales volumes continue to outpace other states.
One of the reasons that Seattle and the bulk of Washington state has been able to avoid the real estate market collapse that has affected the rest of the country is the Growth Management Act the state enacted. This act prevented the development of construction projects in the state as the same rate that occurred in many other states. While other states were building at a rapid rate, Washington was being reigned in.
This turned out to be an advantage for Seattle and other areas in Washington. In markets that experienced a sudden rash of construction, once those projects were completed the market had already begun to crash. As a result, newly completed construction projects were suddenly left vacant with no buyers in sight. Construction loans suddenly began to join the throng of defaulted loans clogging the market.

Market Conditions Continue To Widely Vary From Area To Area

While there are few markets in the country that have managed to survive the current housing market without any battle scars there are some markets that have experienced more serious issues than others. Two of the worst markets in the United States at the moment are Cleveland and Detroit; however, they are definitely not alone when it comes to markets that are falling with no end in sight any time soon.
By and large, the riskiest markets at the moment are those that are experiencing the highest rates of foreclosures. Other factors that are contributing to problem areas include high rates of job loss and slow job growth. Markets in which the number of homes for sale is rapidly rising are also experiencing significant problems. Rapidly rising property values just a few short years ago is also proving to be a stumbling block for many markets.
During the housing boom these markets commonly experienced property value increases of two-fold and even three-fold in many cases. Once the boom ended; however, these markets began to fall and as of yet, they have not hit the bottom. These markets are also at greater risk for problems due to the large presence of adjustable rate mortgages.
During the housing boom, as prices were escalating quickly, buyers frequently took advantage of adjustable rate mortgages to obtain even lower interest rates to make their housing payments more affordable. This was quite common in areas where first-time home buyers were struggling to afford the rapidly rising prices of homes.
The subprime mortgage market is also more highly concentrated in these areas of the country. Lower interest rates at the time prompted many people to rush out and buy homes. Unfortunately, the credit profile of many of these buyers was less than sterling. Mortgage loans made in these markets during this time frequently involved subprime, adjustable rate mortgages. As the market began to fall, interest rates began to increase. Today, those same homeowners are finding they can no longer afford their mortgage payments. The result? Foreclosures have risen sharply in market areas where the boom once allowed housing values to double and even triple practically overnight.
Economic conditions in many areas have further fueled the crisis. As the number of layoffs increase, the number of foreclosures and homes for sale seem to increase as well.
At the moment, the ten worst housing markets in the country are Sacramento, New Orleans, Detroit, Riverside-San Bernardino, Las Vegas, Tampa, Miami, Cleveland, Phoenix and Jacksonville, Florida.
Sacramento, considered to be among the top ten of the worst housing markets, has experienced a drop in homes prices that is well above the national average. Like many other housing markets in similar situations, Sacramento fell victim to a fast paced market and subsequent plummeting pricing. Today the median home price for homes in Sacramento remains far above other markets in the country, despite the worsening situation. Given the large number of houses on the market; however, this is far from good news.
In spite of the situation in Sacramento; however, it is definitely not the worst case scenario at the moment. That honor goes to Detroit, where market prices have experienced a drop of more than 7%. The key factor in Detroit is the massive amounts of layoffs stemming from the auto industry. Matters are not much better in Cleveland where median prices have also dropped by several percent and inventory continues to rise.
While these markets are not showing any signs they will rebound in the near future; there are some markets; however, which are actually posting increases. Seattle is one such market. Median home prices in Seattle have actually risen almost 9% in the last year. Other cities on the rise include Raleigh and Charlotte in North Carolina as well as San Jose, California. San Francisco is not far behind, garnering an increase of more than 7% in the last year.

Real Estate Investors Affected By The Housing Market Crash

While homeowners are facing the crunch of the housing meltdown, investors are also facing serious repercussions as well. The housing market certainly hit is peak during 2005. A number of investors came into the market at the end of 2005 and in 2006, eying the large profits that had been made as a result of the housing boom. At the time the market was quite frenzied and some investors felt all they had to do was quickly snatch up hot profits and resell them as quickly as possible. This strategy produced quick fortunes in many cases and fueled the trend of flipping. Even people who had not had any previous experience in renovations or the real estate industry were quick to become involved.
Today that once frenzied market has begun to not only level off; however, but have completely run out of steam. Investors are finding it difficult to sell properties let alone make a profit as the market continues to experience a glut of inventory. There is little doubt about the fact that the market for flipping has slowed.
Investors have also begun to lose money as a result of the housing crisis. One of the key strategies of being able to make a profit in the process of flipping is to sell the property fast enough that the investor does not need to make any mortgage payments at all or at least as few as possible. During the heyday of the housing boom this was not a problem.
An investor could easily purchase a property, rehab it in less than a month, slap a for sale sign on it and sell it before the first mortgage payment was due. Even if they sold it before the second mortgage payment was due they were still able to come out of the deal with a massive amount of profit because of rapidly rising housing prices. Today that is no longer the case.
As a result, many investors are finding that they must either live in the homes on their own or rent them out. Real Estate Investors who had been renting have been forced to move out of their rental properties in some cases and live in the properties they hoped to flip. In other situations investors have been forced to rent out the properties for reduced rates in order to have at least a little money trickling in to cover mortgage payments and other expenses.
Speculators are experiencing even more problems. The main difference between flippers and speculators is that flippers frequently purchase homes, try to infuse it with some increased value through renovations and then sell it. Speculators; however, tend to purchase properties and then resell them without making any improvements at all. At one time this practice often paid off in big profits. That is not the case today. Investors who once engaged in the process of real estate speculation have discovered they must add value to the property if they are to have even a glimmer of a hope of selling it today.
As a result of the glut of homes on the market due to speculation and flipping, there are some markets that are attempting to eliminate the process all together. Some communities have placed restrictions on the abilities of buyers to resell their home within at least one year period following the date they close on their property.
Since most speculators and investors hope to sell within six months or less, this effectively prevents them from doing so. Communities that had the foresight to take this action at the height of the housing boom have been in a much better place than other communities where flipping and speculation ran rampant at the same time.
While the depressed housing market has caused many investors to step out there is little doubt that once the market corrects itself, which many believe will happen by 2010, these investors will return; poised and ready to begin reaping in the profits once again.

How Will The Real Estate Market Make Out After The Big Crash Of 2008?

Many homeowners are looking at the current real estate market and wondering how much worse the crash will become before it actually begins to improve. Given the fact that the real estate market in the last year has been the worst year in several years for sales, it is little wonder that consumers are so concerned. Default rates rose significantly while the prices of homes fell sharply. In addition, the rate of home ownership began to drop as more first-time homeowners were frozen out of the market. To make matters worse foreclosures soared dramatically and mortgage brokerages began to file for bankruptcy.
If you are like many consumers you too may be wondering how much worse it will become. Recent statistics indicate that housing prices will likely drop further this year before they begin to improve. One of the reasons for this is the fact that credit is still experiencing difficulties while interest rates have not improved either. One of the biggest concerns about the market in the coming months is commercial real estate. Many experts believe that commercial real estate will continue to soften throughout 2008 including shopping centers, offices and apartment buildings. Slower economic expansion could result in higher rates, thus triggering the continued softening of the commercial real estate market.
Many feel that the relief from the real estate market will not be achieved soon, at least not in the coming months. The inventory of homes currently on the market has continued to grow in the past months. As a result, this inventory will need to be handled before stability can occur for the overall market. According to the U.S. Census Bureau the rate of homes in the United States there were vacant and for sale during the last months of 2007 was higher than it had been since 1965.
It is anticipated that the demand for housing will remain lower, thus impacting housing prices. High risk buyers who would have been able to qualify for subprime loans in the past have now discovered they are locked out of the market, thus unable to provide any immediate relief. Furthermore, even buyers who are able to qualify according to the credit but who do not have a large amount for down payments may also discover it remains difficult to become approved for mortgage loans.
While residential real estate markets throughout the United States have been hit hard, Florida seems to be suffering more than many others. Part of the reason for this is the fact that literally thousands of condominiums that were under construction are anticipated to be completed this year. In many cases, deposits have already been placed on these units; however, there is some concern that property value drops and the tightening credit situation will give buyers reason to be concerned and perhaps even back out. In the event a large number of buyers back out of those units, this could cause a serious problem with construction loan defaults in this market.
California has also suffered as buyers who struggled to take out risky loans in order to purchase homes with soaring property values in the past few years discover they are no longer able to meet their housing payments. In many cases, selling those homes now is difficult as property values drop and mortgage payments rise.
While the news certainly may appear to be grim, there is some silver lining to those dark clouds. It appears that the housing market could well bottom out in 2008. This is actually good news because the market must bottom out before it can begin the climb back to the top.

How To Stay Competetive In A Down Market

The real estate market was hot for so long that many agents who entered the real estate industry during this time period do not have any experience with a buyer’s market. Until the recent real estate market crash, the market definitely favored sellers. Homes sold quickly and in many cases homes sold for prices above the listing price. As a result, buyers learned they had to move quite quickly. In fact, it became quite routine for buyers to waive inspections and other basics in a bid to move forward as quickly as possible. These buyers were quite well aware that it was common during this time for sellers to receive multiple offers. In some cases this could easily escalate into a bidding war.
As the real estate market continues to drop; however, the rules have changed and buyers are now holding the power. Whereas they once wanted to move quickly, they now have the luxury of taking their time. In order to succeed in the current market, agents must be certain they understand the elements of this market.
While it was quite possible to make a large sum of money by simply showing a few properties back when it was a seller’s market; that is no longer the case. You must be prepared to face the realities of the existing market in order to survive it.
One of the realities that should be faced is the fact that homes in the current market will typically take at least six months to sell. In some cases, it may take much longer to sell properties. Compare this to homes that sold in a matter of hours or days when it was a seller’s market, and it quickly becomes apparent how much the market has changed. There are steps that can be taken combat this problem including ensuring that properties have the most exposure possible, especially web exposure. Consider offering virtual tours and using multiple, high-quality photographs. You might also think about increasing commission fees to buyer’s agents who make your listings a priority.
In addition, as you face the reality of the current real estate market you must also make sure that sellers face it as well. Many sellers continue to operate under the idea that they will be able to achieve the same level of prices that were typical not that long ago. As a result, many buyers are unrealistic about the prices they hope to achieve. It is critical that you gently introduce sellers to the reality of the current market. At any given time, the current market has about a six month back load of inventory. Even in markets which have not experienced as much of a downturn as other markets, it is essential for properties to be priced accurately or they will usually remain on the market.
As the market shifts, you may also find that you need to shift your marketing plans. Specifically, it should be understood that most areas are now in a buyer’s market. This means, that more time will need to be given to developing buyer leads in order to liquidate the bulk of inventory that is currently on the market. This is not to say, of course, that you should not take new listings; however, to balance out those listings you must work to bring in buyers as well. One great place to look for buyer leads, especially first-time buyers, is actually rental properties. During a down real estate market, there are usually more renters than homeowners.
Most people do not rent out of choice. If they can see that it is to their advantage to buy and can be provided information that will help them to see how buying can be a reality, most people will choose home ownership over renting. Consider offering seminars that are free of charge at your office on the topic of home ownership. Print up fliers and provide advertisements in the local newspaper.

How Real Estate Investors Can Protect Themselves From A Real Estate Market Crash

While the current real estate market is certainly distressing, studying the history of real estate clearly indicates that it is, by nature, cyclical. There have been times throughout history when real estate has boomed and other times when it has remained somewhat stagnant. Real estate still remains one of the best investments around, provided that you exercise the proper amount of precaution in order to avoid getting caught up in a real estate market crash.
First, be aware of the need to change your investment strategy according to the current market. Just as the market changes from time to time, you will need to be prepared to change as well. Keep in mind that just because the market is slumping, or has even already crashed, that does not mean that you must forego investing entirely. It simply means that you will need to invest wisely. One technique that many real estate investors use is to focus on the best areas for the investments. This is because those areas are likely to be the first ones to regain value once the cycle shifts. When prices do begin to pick up once again, you can use your purchase for leverage and sell the property, then move on to another investment. The key is to try to time your purchase so that you make your purchase in these areas right before they peak and then sell them before the interest in that market begins to wane.
It is also important to make sure you are paying attention to where you are focusing your spending. Naturally, when the market is down you will need to wisely slow down on the amount of purchases that you make. Along those same lines; however, you also need to make sure that you are not spending too much on property improvements and renovations. When the market is down is simply not the time to make such an investment.
Paying attention to the cyclical nature of the real estate market itself, especially over the past several decades, can give you a good indication of where the current market may be headed next. The main factor that can affect the real estate market is the theory of supply and demand. Simply put, when supply exceeds the current demand, the market will experience problems. Watching for these trends can provide you with critical clues to gauging the right time to buy as well as to sell.
In addition, be sure to keep an eye on the proportion and layout of your real estate investments. Ultimately, it is good idea to make sure that all of your investments are balanced. So called ‘paper investments’ should be considered carefully to ensure that you are not investing so heavily in the real estate market on paper that your total investments will be put at risk when the market dips.
Finally, make sure that you never become so excited at the thought of an investment that you put the equity in your own home at risk. While it can be quite tempting to use the equity in your home in order to make an investment purchase, this is a risk that can put your own home and future in jeopardy. Only when your own home is secured should you even consider investing in the real estate market.

The Reality That Homeowners Face With Negative Mortgages

The idea of being upside down on a vehicle is not that new. This commonly occurs when a consumer makes the decision to purchase a new vehicle before they have paid off their existing vehicle. As a result, the balance of the loan on the existing vehicle is added to the note for the new vehicle. The result is that the consumer owes more on the new vehicle than it is actually worth.
Today, many consumers are finding they are now upside down on their mortgages. Unfortunately, this did not occur because they bought a new house and added in the cost of their old home to the new mortgage. This situation occurred in many cases because of the rapid rise of home values in many areas followed by the real estate market crash that sent home values subsequently spiraling downward.
In many markets, especially in California, the majority of homeowners are now actually upside down on their mortgages and that number is increasing rapidly. A large number of these homeowners are consumers who purchased their homes at the peak of the boom. During that time home values doubled and even tripled within a short period of time in many areas. This situation leaves many homeowners wondering what they should do. Options are often based on whether the homeowner is able to continue making their monthly mortgage payments. While some are able to pay their monthly mortgages, especially if they have a fixed rate mortgage, that is not the case with others who took out adjustable rate mortgages.
Homeowners who can still afford their monthly mortgage payments and who are not feeling the pressure to sell due to employment reasons may find they are better off by riding out the market decline. There is a wide belief that once the market bottoms out it will begin to rebound. If that occurs, these homeowners could still be poised to make a profit on their home once the market does rebound.
Other homeowners are not so fortunate; however. In some cases, homeowners simply have no choice but to move now rather than wait as a result of relocation or job loss. Homeowners who have adjustable mortgages may also find they are simply no longer able to afford their mortgage payments as they continue to rise. These homeowners are now facing the bitter reality of foreclosure when they are not able to pay off their debts or refinance their home loans because of tightening loan restrictions.
Homeowners are also facing the reality that their options are reduced because they have little if any equity in their homes. The amount of equity that a homeowner has in their home is often determined by the amount of their down payment. During the housing boom it was quite common for many buyers to purchase homes with very little, if any, down payment. At the time it seemed like a good deal; however, today it is causing significant problems as housing values continue to decline.
This situation is causing further problems for homeowners who would like to take out home equity loans either to make necessary home improvements or to consolidate higher interest debts. Even if they are among the few homeowners who do have equity in their home, they are finding that lenders are increasingly wary of making home equity loans. Just as the default rate on mortgage loans have increased, so has the default rate on home equity loans. Quite simply, lenders are no longer willing to take on risk when they are already holding a number of defaulted loans.
The ability to refinance has also dwindled in many locations. Not only are loan guidelines becoming stricter but most homeowners who are upside down are frequently finding the lower value of their home makes it nearly impossible to qualify for a new loan. In essence these homeowners now have negative equity and lenders are simply not willing to take on that risk.

How To Guide For Protecting Yourself Against Future Downturns In The Local Real Estate

While news of the housing crash is making headlines in most papers and front lining the evening news there still remain a few markets where the crash has not made as much headway. If you live in one of these markets and you have not yet been affected by the real estate market crash, be aware that you may not have as much time to respond as you think when the market in your area begins to slide downward.
This is because a market can practically spin on a dime and go from being quite healthy to being practically dead. As a result, you could find yourself holding a property that you are unable to sell. If this is an investment property, this could be quite serious; however, even if it is your own personal residence, it could still cause problems if you need to sell for a profit for some reason. This is why it is imperative to make sure that you protect yourself now so that you will have options available to you in the event the market does begin to crash in your area.
The first step that should be taken to protect yourself and your investment is to change from an interest-only loan or adjustable rate mortgage to a fixed rate mortgage. A fixed rate mortgage will provide you with the opportunity to tap into lower, more secure rates. In the event that rates continue to rise and do so sharply, this can provide you with some peace of mind.
In addition, you need to take steps to ensure that you will be able to afford to remain in your primary residence. In the event that you do not foresee a move in the near future, there should not be any real concern regarding whether the value of your home goes up or down right now. If you plan to be in the home for some time, it is important to recognize that it is really more than just an investment. In addition, it is quite likely that the market will stabilize eventually and the value of your home will stabilize as well. However, if you find it difficult to make your housing payments every month or you think you may need to relocate soon, then you should consider selling the property and moving now before the market in your area slips any further.
Furthermore, you need to ensure that your savings are safe. It is important to recognize that financial institutions do typically invest quite heavily in real estate. If the housing crash continues in the same vein, your investments could be at risk. Savings and loans and banks are the most at risk. To ensure that your investments are safe, it is a good idea to obtain an analysis rating of your bank or S&L.
In addition, it is important to focus on current and future investments. During this time conservative investments are likely to be the smartest investments to make. These investments include Treasury bills and CDs as well as foreign currencies which are strong.
Taking steps now to protect your investments and protect yourself against future possible downturns in the real estate market in your local area will help to guard you against possible risk.

Foreign Buyers Providing Some Relief To The Real Estate Market

Economic news around the country has certainly appeared to be dim in the last few months. As if the housing crisis was not enough, now it appears that the country is in the midst of a recession. The dollar has weakened and many consumers find themselves wondering whether relief is in sight. Quite surprisingly, these problems may actually provide some encouragement for foreign investors to rally the housing market.
One of the reasons that many homeowners are finding it difficult to sell their homes is the fact that many would-be buyers either cannot afford the prices or they cannot qualify for mortgage loans. As a result, they have found they have little choice but to continue to rent and wait for the housing market to stabilize before they venture into the home buying process. Some homeowners are finding interested buyers in a surprising source; however. Today, homeowners are just as likely to discover buyers hailing from abroad as from next door.
Experts speculate that investment from Europeans is likely to increase in the coming months. Many speculate that foreign real estate investors have recognized the value in buying homes in the U.S. Prices have declined, making them far more attractive. In fact, in some cases, foreign buyers could be poised to replace the niche that first-time home buyers held before they were squeezed out of the market as a result of the recent real estate crash.
If this trend continues, it could very well provide some relief for homeowners who either need to upgrade to larger homes or who need to get out of homes they can no longer afford.
Brokers are reporting that inquiries from foreign investors are definitely on the rise. Compared to the number of inquiries that were received just a year ago, many brokers are seeing an increase of as much as five times the amount witnessed just a year ago.
A foreign buyer who invests in a home today would need far less money in terms of euros to make a substantial down payment on a home as a result of the weakening dollar. In fact, foreign buyers today could make what is essentially a $50,000 down payment for little more than 34,000 euros today. A year ago that same buyer would have needed nearly 38,000 euros in order to offer the same amount for a down payment. Quite simply, foreign buyers are able to buy homes in the U.S. for less of an investment than American buyers.
The exchange rate has definitely provided support for increased spending power in many locations. In certain areas, like New York and Chicago, the demand has definitely increased. In some cases, the demand has grown so much that it is actually outpacing supply. California and Florida are also proving to be popular with foreign buyers and investors. The latter two markets, which have been among the hardest hit, are embracing the relief with open arms. Florida, in particular, is still struggling with the crash of the condo market.
Sellers and agents have quickly latched onto the idea that the place to look for interested buyers could very well be overseas. As a result, many properties are now being marketed specifically toward foreign buyers. High-end luxury homes that have languished on the market for months are some of the first to be targeted for interested foreign buyers.
The Internet has proven to be a successful marketing tool in the past and today agents and sellers have discovered it is often the easiest way to reach foreign buyers. Compared to other advertising mediums it is often far less expensive and allows them to reach a broader audience. When marketing properties toward foreign buyers, this can be particularly important.
Foreign buyers may not be the full salvation that real estate agents and homeowners need to completely recover from the housing bust; however, they are certainly providing a bit of welcome relief in many beleaguered real estate markets.

Falling Home Prices Have Little Effect On Property Taxes

Many homeowners have been taken by surprise when the value of their home suddenly seemed to hit freefall. It would certainly seem as though there should be one advantage to dropping home prices; however. Many homeowners assumed that when the value of their homes fell, their property taxes would as well. This has not been the case in many areas; however.
In some cases; homeowners have been shocked to discover that not only have their property tax bills not decreased, they have actually increased in some cases. This has been quite a surprise for homeowners as they struggle to understand why they are paying more in taxes on homes that are not worth as much as they were just a year ago.
The reason for this relates to the complex manner in which property taxes are calculated in many areas. One of the biggest problems, especially in Nevada, is the fact that property tax increases were capped during the housing boom. During this time home values skyrocketed rapidly. Today, the values of homes in these same areas are falling; however, the decreases have not actually been enough to compensate for the increases of just a few years ago. Consequently, the values of homes would need to decrease sharply over a short period of time in order for property tax bills to decrease. While declining property values have certainly been a problem, they simply have not decreased enough in many areas to provide any relief from property tax bills.
As the rate of defaulted loans and foreclosures continue to soar in many locations, numerous counties have discovered that the rate of unpaid properties taxes is also on the rise. The metro Detroit area, in particular, is experiencing a record high rate of unpaid property taxes. Detroit is currently considered to be one of the worst housing markets in the United States based on the decline of housing prices and increase of foreclosures. The lack of jobs and weak economy in the greater Detroit area are considered to be the primary factors contributing to the housing crash in the area.
Even if property owners are paying their monthly mortgage payments on time they could still be at risk for losing their properties through foreclosure if they fail to pay their property taxes for three years in a row. In such situations, the county would then take control of the home and auction it off to pay the balance of taxes owed. Counties in the Detroit area are currently struggling to recoup hundreds of millions of dollars in unpaid property taxes. The issue has had significant repercussions on counties in the greater Detroit area.
Property owners who find they are behind on the property taxes can take some steps to stave off foreclosure. The first step is to begin making payments on their taxes. Many homeowners make the mistake of thinking they are doomed if they cannot pay off all of the taxes owed and thus pay nothing at all. Keep in mind that making any payment, even if you cannot pay all of the taxes, is better than paying nothing at all. If you are not able to pay all of the taxes; at least try to pay off your oldest taxes first. Remember that taxes which remain unpaid for three years consecutively places you at risk for foreclosure. Pay off the oldest taxes first to combat this risk.
You might also check with your county to determine whether you may be eligible for an extension for property taxes which are unpaid. In some situations, the county treasurer may be able to grant you an exemption for your taxes if you are able to demonstrate extreme hardship. It is best to do this as early as possible; however, as there are commonly deadlines for the exemption applications.
In addition, check with your mortgage company or bank to find out whether they offer any type of program or loan that can provide you with the money needed to cover your taxes. It is never in the best interest of the bank to have the county take over the property, so they are often willing to work with the homeowner to avoid having this happen. Keep in mind; however, that when you do this will you will be taking on an increased debt burden.

Events Leading Up To The Real Estate Market Crash Of 2008

While many predicted the current collapse of the real estate market, others were taken by surprise when the market that had left plenty of opportunity in the last few years for profit began to tumble.
Certainly, one of the leading events that eventually resulted in the crash of the real estate market was the crumble of the subprime market. As a result an unfathomable amount of companies suddenly were suddenly facing foreclosure. Even those companies that were not forced to declare foreclosure found they had suddenly lost billions of dollars.
The news has been filled with reports regarding the subprime market crash; however, while it has affected most property owners to some degree there remain many of remain uncertain exactly how this came to be.
Just a few years ago subprime mortgages were a great advantage to many property buyers. Buyers who were interested in taking advantage of the hot real estate market but who lacked good credit histories were able to take advantage of subprime mortgages in order to obtain loans. The underwriting guidelines for these loans were generally more lax than traditional mortgages. This allowed even buyers with poor credit to obtain a loan. In exchange for making a loan to buyer with less than stellar credit, lenders were able to charge a higher rate of interest. In addition, so the theory went, lenders relied on the belief that they would be able to foreclose on property and sell it for a profit in the event the borrower defaulted on the loan.
The money which funded these loans came from a variety of sources. Low interest rates made it possible in many instances for lenders to actually borrow money and then loan out those funds to home buyers. In other cases, the money was obtained from more complicated sources. As you may or may not be aware, it is not uncommon for governments to borrow money from central banks. This practice is particularly common in the United States.
At the time the housing market was stable. In fact, the housing market was experiencing a high that had not been seen in quite some time. Beyond the fact that many homebuyers were taking on massive amounts of debt there also existed another problem. Due to the health of the real estate market at the time, in many cases there were expectations regarding future growth that in hindsight now appear to have been unrealistic.
The last two years of the real estate boom occurred in 2005 and 2006. During that time period lenders did not hesitate in the least to lend money to borrowers regardless of their credit profile. These loans represented a tremendous money-making opportunity for lenders. Problems really began to occur; however, when interest rates began to rise from their previous lows. Historically, rising interest rates have always had a negative effect on the real estate market. When rates are low they help to produce demand; however, when they are high they ultimately cause prices to fall. Until mid-2006 home builders could not build new homes fast enough to meet the growing demand. During mid-year; however, the demand began to slow. It was also about this time that the rate of defaults on loans began to increase.
Before long many mortgage lenders began to find it difficult to obtain money from their previous sources of funding. As a result, would-be buyers discovered that loans were no longer as easy to obtain due to the fact that money was no longer as widely available. Additionally, investors suddenly became wary of taking on risk and underwriting guidelines grew stricter. Homeowners who had taken out loans with adjustable rates began to find it difficult to meet their mortgage payments as interest rates continued to rise. More stringent underwriting guidelines meant they were unable to refinance to fixed rate mortgages in some cases. As a result, defaults continued to rise; fueling the massive rash of foreclosures.

Do Consumers Benefit From A Consumer's Market

More and more consumers are recognizing that at least for right now they are better of financially renting than buying. This is certainly a departure from the past when most consumers realized that the best financial option would be to buy rather than rent so that their money would go toward creating equity in a home.
Today that is no longer the case; however. While rents have continued to rise in many locations, consumers are still finding they are often able to rent for less money than what they would pay for a monthly mortgage payment on a comparable property. In some cases, renters are able to save between 40% and 50% by renting instead of buying.
One of the reasons for this is that in some locations, property values rose quite steeply. Today, buyers who snatched up those homes without blinking have discovered they must now sell. The problem? They need to sell the homes at the prices at which they purchased them two years ago to recoup the balance they owe on the mortgage. Renters just are not willing to pay more money than a home is worth.
Even renters who are able to qualify for mortgages just do not feel as though they are getting enough home for their money, especially when they can often rent a comparable or even larger home for less money.
As a result of the shifting market, many experts are quick to point out that today the market is no longer a seller’s market and it is not really a buyer’s market either. Instead, it has become more of a renter’s market.
Other renters are holding off on the idea of buying because they are concerned that prices have not yet hit the lowest point. They are primarily concerned that if they purchase a home today it may not be worth the same amount just six months from now. They feel it is far more prudent to wait and see exactly where the housing market will land before they consider buying a home. Other renters are concerned about the upcoming hurricane season. Few have forgotten the hurricane season of just two years ago that devastated many areas. Homeowners in those areas, especially those without insurance, have yet to recover.
While some areas are experiencing a deficit in supply of rental properties, in other areas homeowners have recognized the wisdom of holding off on selling their homes. They, too, are reluctant to sell their homes now when it seems more prudent to wait and see when the market will stabilize. To help make ends meet, many of these homeowners are willing to rent out their homes to the scores of renters lining up to take advantage of the opportunity. Even homes that are on the market for sale are also available for rent. While renters must accept the reality that the home in which they are living must be available for showings, they still feel the trade-off is quite worth it.
Would-be investors who attempted to get in on the quick profit potential of flipping homes have also discovered that it makes more sense to rent out their properties right now instead of trying to selling them. In some cases, investors are discovering they simply do not have any other options when they must meet mortgage payments every month and are unable to sell their properties. In some cases, this means renting the properties at a loss, creating a negative cash flow.
In fact, this situation has become so much of a problem that landlords in certain niche markets are finding they must cut rents in order to create even a small amount of cash flow. These investors have quickly discovered that it is far better to rent right away at a loss than wait several months to try and attain the amount of rent they really need. Although landlords are often upside down on most of these properties, renting them out has proven to be the safest method; at least for now.

A Look At The Future Of The Housing Market

In some of the worst housing markets in the country, deflation has reached double-digit proportions. While housing woes have reached around the country, California appears to be poised to rank among the worse. One of the primary reasons for this is the fact that in the last several months California has experienced the largest rate of deflating home prices. In fact, home prices in California have fallen at levels that have been unprecedented.
Miami, Florida has also proven to be a difficult market at the moment. Here, the weak mortgage market and record high rates of foreclosures have let to decreasing home values as well. In fact, Miami has been among the worst home markets in the country for two years running. The condo boom in Miami just a few years ago has fueled further problems that have now spiraled into a massive real estate bust.
While Florida and California may have been easy to predict as being among the first housing markets to crumble when the real estate market crashed, there are other markets that are on the precipice of falling which have not been as easy to predict. One of the primary reasons that Florida and California were poised to fall so rapidly were rapidly escalating home values during the boom a few years ago.
Other markets; however, did not rise as much or as quickly, which could be one reason why they have managed to avoid reaching the top of the list; at least until now. These markets include Arizona, Nevada, Indiana and Massachusetts. Declining home prices as well as high rates of foreclosures in these states are also contributing to their worsening real estate market conditions. In Michigan, where layoffs have been significant, the economy is playing a strong role.
Problems are expected to grow worse in many markets as several million adjustable rate mortgages are scheduled to be reset in the coming months. As these mortgages are reset, it is logical to assume that even more homeowners will find themselves facing the reality of being unable to pay their monthly mortgage payments in certain markets. When that happens they will be forced to either face foreclosure or in some cases make a short sell on their home as refinancing is becoming less and less of an option for many homeowners.
According to most statistics, the remainder of 2008 is still poised for problems in the housing market. Many statistics indicate that home values could continue to drop and new homes could experience a loss of up to 18% before the year is out. While there are some indications that the market could begin to level off at the end of 2008 or the beginning of 2009, many experts are quick to warn that when the market does begin to rebound it will not reach the point where it left off. In comparison to the housing peak of 2005, the rebounded market could still be quite a bit lower. Part of the reason for this is that in many areas, prices escalated so quickly that there is simply no way for prices to rebound back to that point.
Still, there may be some home for certain areas. In many markets sub-prime mortgages have either left the market through quick sales or foreclosure. The stimulus package that is on the horizon is anticipated to help the housing market in many areas.
First-time home buyers may soon find the relief they have been seeking since they were forced out of the market; however, it may longer before homeowners begin to experience that same kind of recovery. This is because most homeowners are still reluctant to sell and lose the equity they once had in their homes. The simple fact is that many homeowners have yet to accept the fact that they can no longer get the same prices for that was possible just a few short years ago.

The Numerous Risks Of Real Estate Investing

All good things carry with them some degree of risk. The same holds true with real estate investing. Despite the promise of high rewards you should temper those ambitions with the reality that the risks involved are more often than not just as high as the potential rewards. For this reason you need to take every possible precaution in order to insure that you minimize your exposure to risk whenever possible or at the very least are prepared, financially and mentally to accept the consequences of those risks if the time comes.
The most obvious risk when it comes to real estate investing is the immediate risk of losing your investment. This risk can be a huge blow depending on how large your investment was to begin with but isn't the worst thing that can happen during the course of a real estate investment gone wrong. While I'm certainly not trying to talk you out of investing in real estate all together it is a good idea to have a realistic view of the risks and the potential rewards.
If you are flipping houses as your real estate investment you have the potential to loose a little more as you can become injured during the course of your work. The sad truth is that many who are attempting to break into the business of flipping houses have neither adequate insurance coverage (this is true of themselves and the property in general and others that may be working on the property), the money, nor the time that a serious injury might require.
Another risk common to real estate investing is the fact that stuff happens. Market trends tumble, companies go out of business leaving towns and the local real estate market in shambles, accidents happen during the course of the work, natural disasters occur, and buyers change their minds and pull out at the last minute. Each of these things can have devastating consequences and are almost always events that are completely beyond your control as a real estate investor.
If that wasn't enough many investors fail to have a proper inspection and find out when it is really too late that there are serious structural problems and other sorts of things wrong with the property. These things cost money to repair and cut into profits, occasionally resulting in a loss. The thing is that once you find out something is wrong with the property you are honor bound to either reveal the problem to potential buyers or fix the problems before selling the house. In the case of a flip, many major problems will undo the work that has already be done. If this doesn't remind you of the importance of a thorough inspection I have no idea exactly what will but inspections are important for many reasons and can save a lot of time and money if you have one done ahead of time.
Do not allow the risks of real estate investing prevent you from taking the plunge. They are spelled out here to remind you that prudence and caution are wise when investing in real estate not to talk you out of this potentially lucrative field of investing. If you are interested in real estate investing there is no reason on earth you shouldn't take the time and make the effort to learn more about its potential.

The Various Risks Of Flipping Houses

Real estate investing is a field in which millionaires are made and lost on an almost daily basis. Most of the wealthiest investors in the world will agree that real estate is by far one of the most profitable fields in which you could invest. It also carries some of the biggest risks when it comes to investing at the same time. Real estate investments are large investments for the most part so when you loose on an investment such as this the losses tend to be much greater than when you loose in other investment avenues.
When it comes to flipping houses there are several risks that you should consider before diving in headfirst. While most of the risks are not something you can anticipate or plan for they are risks that you should be aware of and carefully consider before investing in a risky venture such as a property flip.
1) Fickle market. The real estate market is a fickle business. There are countless things that can greatly impact the likelihood that your investment will sell quickly or sit on the market for months on end and most of them are beyond your control Tornadoes strike nearby, crime happens nearby, a big company goes out of business, or a new company moves into the neighborhood. For better or worse all of these things have a profound impact on the real estate values nearby.2) Neighborhood knowledge. It is very important that you take the time to get to know the neighborhood before you invest in a house you are planning to flip. You want to make sure that your vision for the home fits with the reality of the neighborhood and that the average income of the people in the neighborhood will be able to purchase the home you are creating.3) Bursting bubbles. I'm sure you've heard all kinds of talk about the real estate bubble and how it seams to be bursting. While I'm not sure I put much stock in that I do know that heavy taxes in an area, new taxes in an area, and the encroachment of crime in an area can give you a sudden stream of competition for low prices while also making it more difficult in general for the property to sell. 4) Underestimating your own limitations. This is a big deal when it comes to risks in the business of flipping houses. You need to have realistic expectations before getting in of the time frame for completion, budget, and what you can do yourself and what you will need to hire professionals to handle. If you don't you can seriously impair your budget and the impact of the work you do as a whole. 5) Underestimating prices. This is another big deal because you need to have realistic expectations when it comes to the price of supplies, tools, labor, and equipment that will be required in order to complete your house flip. Failing to have a reasonable grasp of current prices can have a devastating impact on your budget and how much you can actually accomplish during the course of your house flip.6) Great profits. While some do not necessarily consider this a risk, excessive profits do work to impair your ability to pull out your wallet at the bank or anywhere else along the way. While we could be all so lucky as to call that a risk it is a very possible outcome of your house flipping attempt as long as you spend at least as much time in planning your flip as you do in executing it.
You should understand that there is no such thing as a no risk flip or a no risk real estate investment. You cannot eliminate the risk all together for the types of rewards that stand to be made through real estate investing and flipping houses. Tread softly, plan wisely, and work diligently in order to make your financial dreams a reality through real estate investing.

Why You Should Flip Houses

There are many great questions to ask when it comes to real estate investing and one of the many that you should consider if you are thinking of flipping houses for your real estate investment is: why? Why flip houses? It certainly seems as though it's a great deal of work and it is. It isn't an easy task to take upon your own shoulders and yet many people around the world purchase houses each and every day for the purpose of flipping those houses. Why? Profit is the long and the short answer but it goes much deeper than that for many who are interested in flipping houses even if profit is the ultimate goal.
Some people really enjoy working with their hands. Purchasing a property in need of light cosmetic repairs and retouches is a great way to get your hands dirty without risking too much money, time or effort. Properties needing more serious work may require a pair of hands that have some degree of experience rather than hands that are best suited for balancing books. That being said if you want to do the work yourself and enjoy the prospect you may find that you can save a great deal of money if you use your own labor rather than paying for the labor of others when it comes to flipping a house.
Other people go into this line of work because the idea of giving a family their dream home is so appealing. When you go in and flip a house you are putting your sweat into creating someone else's dream. You are taking something that may have been plain, ugly, or drab and turning it into a beautiful home in which they can build their dreams. While it may seem a little romantic, it is in a way. This is part of the beauty of flipping houses though; there really is no wrong reason to do it.
Some people choose this line of work because deep down inside they need the pain that goes into turning a lump of coal into a diamond. I think the literal term for these people (and really this could apply to anyone who decided to flip houses for a living) is masochist. The shoe fits for most people who flip houses. If they didn't know going into it the first time they certainly know before they go into it a second time.
Then there are those that are simply driven by profit. There really isn't anything at all wrong with that. Most of us would never get into this business if there weren't some hope of a pot of gold on the other side of the rainbow. This is hard work and there are days that the promise of a pay off is the only thing that gets you out of bed and hitting the ground running yet again.
Just remember that at the end of the day it doesn't matter what your goal in flipping houses is. What matters is that you show up day after day and do the work necessary to pull off your house flip. This is what makes the difference between those playing at flipping houses and those who are doomed to be one hit wonders in this brutal business. Of course, there are still those few who flip houses just for the sake of seeing the finished product when everything is said and done.