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Posts Tagged ‘Low Home Prices’

Prospective home buyers should consider becoming homeowners with home prices at historic lows, but in many housing markets across the nation, this is not the case. Much of the blame can be placed on a nearly five year slide in home values. Those home price declines have in some areas rapidly declined over the past two quarters and have left many sellers unwilling or unable to reduce their asking prices. Buyers, in turn, often will not agree to purchase a home without receiving some type of discount. These problems are keeping these areas from being the buyer’s market they have the potential to become.

Because the accelerated decline in home prices over the last six months has left sellers unwilling to lower their prices, many buyers are trying to purchase distressed and bank owned foreclosures. These homes will enter the market at deeply discounted prices, but are being quickly bought up by investors who pay cash for the properties. The inventories that end up still available are usually not attractive to prospective buyers because all of the quality housing was bought up already by investors.

Another reason many buyers are looking to buy distressed or bank owned foreclosure properties is the nagging fear that any property they might purchase will just continue to lose value while home prices continue their downward slide. This is a real fear that these potential homebuyers have. I mean as mentioned earlier, homes have declined in value for five years straight. So anyone who purchased a home over the past five years has already lost money on their purchase. This is such a change from the good days when you could buy a home and see it increase in value before it was finished being built. Bank owned foreclosures and distressed sales will remain attractive to potential buyers until home prices have bottomed out and start to show signs of an upward trend.

While bank owned foreclosures are in demand, processing and document handling problems within mortgage companies have led to a steep decline in the amount of foreclosures that rapidly hit the market in states such as New Jersey, New York and Florida, where the courts must take part in processing foreclosures.

As jobs are being added, some of the challenges that the housing market must overcome are being eased, which will lead to higher demand for new and existing homes. These added jobs will also likely help reduce the number of delinquencies which will aid in the overall recovery of the housing market.