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The idea that the housing market has taken a steady decline has sunk in, and for most, is an acceptable reality. However, there are still areas that are being affected by the housing market crisis, and the visual reminder is in the value that is continually dropping in homes across the United States. While this may present a fantastic buyer’s market, it does mean that homes are no longer the high priority asset that most want, simply because they are not guaranteed to hold the value they once did.

Arizona Shocker

Arizona is home to beautiful lakes, tranquil desert settings, and some of the most opulent homes in the country. The Scottsdale, Tempe, Estonia, and surrounding areas are considered some of the most high end that the fine state of Arizona has to offer. Homes sold in these areas, pre 2008, for an average of $2.8 million for the higher echelon real estate. Today these homes sell for an average of $800,000.00.

The issue for many of the larger homes, not just in the case of Arizona, but of the entire U.S., is that rural areas are simply no longer sustainable for those that have to either commute via plane, or cannot find work close to home. The reality is that the cities are seeing much growth, comparatively speaking, while further outreaching suburbs are still seeing decline.

Way Back When…

There was a time when people would be able to support their homes through their work regardless of where they lived. If they had rural homes, they were farmers or produced some kind of product for independent sustainability. Today’s society is completely dependent on work of another kind, and when that work is no longer close to home, people will leave those areas. This is the case with Arizona.

There is always a business strategy involved when making a home purchase. For those that are savvy enough to finagle great deals on a new home, they understand what it takes to get the absolutely best deal possible. For the rest of the group of buyers they enlist the help of real estate agents, a project manager, or another entity that can help steer the sale or purchase of a home. There are some key types of negotiating tactics that these professionals use to help get the best overall price for their clients, and they are simple concepts that make a big difference.

Buy Low, Sell High

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The theory behind investments is to always buy at the cheapest possible rate, and then sell at the highest possible time. This is how many have made their millions. When it comes to the purchase of a home in today’s real estate market, the idea of buying low is an absolute. The housing prices are the lowest they have been in nearly 30 years, thus making this the ultimate buyer?s market. The key is driving down the price until the buyer feels confident about their purchase. Some of the ways to do this include:

1. Bidding
2. Placing an offer twice as low as what is realistic, knowing that the seller will counter offer
3. Submitting offers with banks on potential short sales

Buyers Are Winning

With the housing market taking the slump that is has, many banks are holding onto foreclosed properties that are not selling. This means that the property taxes, and lack of repayment are sitting on the bank?s books. This means that sellers, especially banks, are desperate to clear properties off of their list. Buyers can take full advantage of this allowing them to submit ridiculous bids for homes, and being awarded them.

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If you decide to invest in real estate, there are plenty of ways in which you can do that. You may want to consider getting into the market now, too, because prices are low and interest rates are still far below where they used to be. Consider whether you want to buy something for yourself, or whether you want to purchase something that will be used by others – like a house, apartment or commercial building that you’ll be renting out. Either way, this can be a great time to get into the market and start buying properties that you can fix up to use and/or resell later when the market improves.

There are some specific things that you should look for when you’re investing in real estate. Getting a home inspection is critical, because you want to make sure that any home or other building that you buy is in good shape and worth the price that you’re paying for it. If you buy something that’s a lemon, you could end up spending thousands of dollars to fix it and you may never get your investment back when you sell it later on. Renting it out can be difficult, too, if you need to fix it up or it doesn’t have much to offer to a prospective tenant.

If you buy properties that you’re going to rent out, you can handle them yourself or get a property manager to deal with them. No matter which option you choose, buying a good property that you really like and that will be popular with others is a sure way to keep you happy and keep your property rented. Once it has been inspected and you know that you’re paying a good price for it, you can move forward with your purchase and enjoy your new investment.

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The days of subprime lending have drawn to a close. Being that this type of lending was the cause of the collapse of the housing market, banks and lending institutions do not even entertain the idea of lending in a subprime fashion. Today, buyers have to meet the qualifications for both credit and income, usually of a median FICO of 750. This has caused a major stall in the sale of homes because the lack of subprime lending simply eliminates nearly 40% of potential buyers.

Debt to Income Blow Out

People had grown accustomed to living beyond their means, and this includes the accumulation of debt. During subprime lending, borrowers could have their mortgage payment take approximately 43% of their gross income, while leaving the rest to deal with bills and other expenses. When looking at the net income of borrowers, the new mortgage payment would take about 60% of their income. The strain was overwhelming for most, thus the huge foreclosure rate that is present today. Banks will consider buyers that have an average of 10% to 15% debt from their gross income, and not allowing them to max out in mortgage bills beyond 35% of their gross income.

Ideal for a Mortgage

The ideal buyer for a mortgage should not have more than 35% used on credit cards, and little to no debt on their credit. The reason for this is that many companies are shy about their lending in this shaky housing market. This means that many buyers are looking for homes that they can easily afford. This has made smaller homes, apartments and condominiums very appealing to today’s buyers. The perfect mortgage scenario for people is to keep their payment within the 25% of their net income.

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Capitalizing on a slow housing market is how many investors made their millions. There are pros and cons to investing in this current market, some being that property is sold for a rock bottom price, but the return could be a decade away. The idea with investing today is to use the low prices to gobble as much property up while the going to still good. Here is the catch; the going is predicted to remain good for another 18 to 24 months. This is due to the current rise in foreclosure rates, long term property listing on the MLA, and the lack of lending from banks.

During the 1930s, investors realized that the Great Depression and the Dust Bowl were not going to be the final chapter in American progress. There were those that began to reinvest in the stock market, in land, and with industry. Those are the select few that were able to come out of the poorest era of American history with millions in their pockets. Today, times are tough, and property values are at their lowest they have been in nearly 40 years. Homes are listed on auction websites for hundreds of dollars. An entire block in some states can be purchased for the price of a large home, and occupancy rates on rental are near capacity.

While the options to resell a home right away, or flip a property may not be an option, consider taking on a property for the idea of long term, slow growth return. It is only a matter of time before the market rebounds, and prices are no longer at a level where buying multiple properties is an option. Homes have been listed in Georgia for $4,500.00. It is those types of opportunities that make this a buyer?s market, that create investors, and bring the real estate market back to life.

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The housing market, pre subprime crash, had a steady increase in equity of about three percent per annual year after purchase. Prices had remained that way unless there was a major development in an area such as industry, or the area became a lucrative commuter area. Regardless of the reason, the steady increase was stabilized by the local economy, which of course was a direct reflection of the national economy.

Today, there are much more rigid financing regulations in place, and as a result, very few people are able to purchase a home. Some states have lost major bank financing in certain areas, making a seller carry back all the more popular plan for home sale transactions. There are also many note buyers on the market that are capitalizing on the fact that they can purchase a home for pennies on the dollar, then turn around and sell it at short sale prices, and still make a profit.

There are many deals to be had in the market, and many buyers are eager to take advantage of them. Considering an alternative loan option in this market is something that can be scary, as it is traversing unknown territory. The three percent down FHA loan still exists, it is just for FICO of 750 or higher. Finding partners or investors is a great way to close the deal on a steal of a property. Many have considered purchasing homes as a joint venture, rent them, then wait for the economic turn around to provide profits.

There are areas where this is currently happening. Small towns near capital cities are beginning to grow. One area where the home purchase trend is beginning to take shape is outside of Atlanta. This major city is beginning to see glimmers of growth, and the real estate market is getting another chance at gaining momentum.

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Short sales are a way for many homeowners to sell without having to risk a foreclosure on their home. Investigating with a state’s short sale regulations will reveal that some states, such as California, will forgive any remaining mortgage left on the home after the sale. Other states, like Florida, will require sellers to repay the balance that was not included in the sale price. Banks usually negotiate and work out a reasonable payment plan that mimics the process of student loans. There are hardship periods built into the program, and this is a necessary process as there is no note or property to attach debt to.

The benefits of a short sale on a home include relieving the family of the burden of the mortgage, allowing the family to quickly vacate and get rid of the home, and allowing a family to quickly sell their home without the ugly credit marks of a foreclosure being attached. Many people find this to be the best solution for them as it preserves their credit, but also their dignity in many cases. The home is able to be showcased as a regular for sale property, meaning the family can remain in the home during the process.

As far as banks are concerned, they want to be able to verify that the information of the short sale, and the events surrounding the need, are being presented accurately. Many banks will request a written application, a bid price for a short sale buyer, and income verification from the current owners. This is intended to protect the bank?s interest in the dealings, and it ensures that the process is being completed through honest intentions. Some applications will run credit checks, employment verifications, and will request referral letters. This is all to verify the information that a dire hardship is present.

Everyone is aware of the housing situation that we face in the U.S., but few realize the collateral damage that has echoed on particular areas of the country, and they continue to feel the effects of a tough economy. States like California, Florida, and Georgia made the list of hardest hit areas once the sub prime market fell in the late 2000′s. The newest inductees to the hardest hit list would include New York and Michigan. There are parts of these states, mostly upstate New York, and namely Detroit, that are becoming ghost towns.

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Detroit, in particular, has?homes listed for as low as $1,500.00. This is not a rare sight as the industry has left the area. The State of Michigan considered sending an idea to vote that would suggest leveling specific areas, then utilizing them as farmland. The original hardest hit states still continue to suffer with their housing markets, and if anything, they continue to decline with serious loans restriction in Georgia, and major banks refusing to lend in Florida. In fact, it was the high foreclosure rate in California that brought so much attention to the need to audit banks on their processes for removing people from their homes.

All states of the union have been adversely affected by the real estate crash, but some seem to remain somewhat sheltered from the catastrophic ripples that others have felt. There are even some areas showing signs of life, but those statistics are slow in upward growth, and the prediction by Alan Greenspan that home prices would return to 1970′s levels has become a scary reality for many. While these times are burdening, the one glimmer of hope is that the rental market is booming. For some, they have found a way to capitalize on a poor real estate market, and have had success through renting.

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With the crash of the U.S. housing market in the late 2000s, many interested observers have watched with great interest to see when the bottom of the market has been reached.

From investors to first time home buyers, the question as to when to buy homes in the current climate is key to making a wise decision. From the mid 1990s through the mid 2000s, the housing market grew at a record pace. It was an easy decision to buy into the market, as properties’ values soared year after year. This housing “bubble” allowed many to accumulate significant equity in their homes, without having to give much thought as to when and where to buy. With the bubble bursting the way it has, driving the housing market down to pricing not seen since the early 2000s (and in some areas, even earlier), it has given many potential buyers reason to pause as they consider the wisdom of putting their capital into such a slow to negative returning investment.

While there is still much concern regarding the volatility of the U.S. housing market, many experts feel that we are at, or near, the floor of pricing for homes in the U.S. Key factors, such as location (the most important consideration in real estate investment), record foreclosure rates allowing for a tremendous number of bank-owned homes which can be purchased for below traditional market pricing, and mortgage interest rates (which remain low) make purchasing in today’s climate an attractive option. However, the possibility remains of prices being driven even lower, in part due to the more stringent criteria being used for mortgage approvals, the continuing struggles of the U.S. economy, and the unemployment rates, which hover in the 9% range. Fewer qualified buyers means a housing market in the US that remains very soft.

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If you’re trying to buy a home, you have a budget in mind. Most people end up buying at the top end of their budget or even a little bit outside of it, but you don’t have to be one of those people. You can find something that’s inexpensive and really great. When you decide to look at houses, do you set both a top and bottom figure? A range that you want to look in? That’s generally what people do, and it can stop them from seeing some great homes that are actually priced lower than the homes they’ve asked to look at. Don’t assume you can’t find something that costs less and that fits your needs.

Because of the foreclosures and other problems with the housing market, it’s important you remain open to different options. Something that was valued at one hundred thousand dollars two years ago might have a value of sixty thousand dollars today. Your money will go further in this housing market, and you have more buying power. There are two ways to use that. You can buy at the very top of your price range, knowing you’re getting a home that will eventually be worth much more than what you paid, or you can buy at the low end of your price range (or even below it) and get a house that you have to pay substantially less for.

By doing that, you have a lower house payment that you won’t have to struggle to make in a volatile job market, and you also have a chance to free up money to do work on the house. It may take a little bit of time, but you can turn it into just what you want – and all because you didn’t focus on the fact that it seemed to be priced too low for what you wanted.