What's Ahead For The Home Market?

For a while it seemed as if the long awaited housing recovery was here. Home prices stopped falling and stayed pretty close to stable. But the pickup was short lived. Economists are predicting home prices to fall again and bottom out by early 2011.

We can place much of the blame on distressed properties; more than 3 million homes are expected to get foreclosure notices this year, as job losses are still straining the market. In addition, one in every four homeowners with a mortgage now owes more on the loan than the house is worth. And a growing number of these owners have made a strategic decision to default. Meanwhile, short sales have spiked to an all time high. There is now a streamlined approval process and a new government program that gives servicers financial incentives to arrange a short sale instead of foreclosing on a troubled property.

Tips on focusing towards bank-owned properties

Sure, there are some real gems in the mix but you've got to be prepared to listen to your realtor's recommendations and be ready to throw muscle int the clean up. These properties sometimes need serious repairs and you don't always have a fair chance to check the property out before bidding starts. You don't have to take on the risk of a distressed property to reap the benefits of bargains. If you're shopping in an area with a growing number of foreclosures, use that fact to get price concessions from anxious owners. Your realtor can insist the homeowner fix anything wrong with the house or provide a discount to you so you can fix it later.

Hoping to sell your home? Don't try to compete with foreclosed properties in your area. Instead, play up your advantages; a home that's in move-in condition and the possibility of a quick deal. And to speed up the deal even more you can reassure buyers with a warranty package that will cost you somewhere around $300-$400.

Which homebuyers are getting the best deals?

Trade-up buyers who want a bigger home are finding the best deals. That same house on the hill that sold for $500,000 can now be purchased for a mere $350,000; even the Mc Mansions that were selling for $750,000 can now be attained for $550,000.

Looking Ahead at Mortgage Rates

The best mortgage rates are now because the consensus is that by year end/early 2011 rates will climb up to 6%...maybe. While many people are in a hold pattern and not sure whether to lock into low rates or wait, consider this - mortgage rates are going to eventually climb and if today's rates are just one point below, you are looking at a decrease of about $300 in mortgage payments. Do you really want to pay more than you have to?