There are some really great deals to be had for savvy real estate investors that understand the trends in the market and do not mind doing a little work in trenches. With the massive amounts of foreclosure homes hitting the real estate market the price of housing is seeing a drop. Current economic factors have contributed to the down turn in resale home purchases while new home construction has been halted by the instability and uncertainty of people pulling back their hard earned money during times of increasing unemployment and layoff rumors. As the nations trust in the economy has been tested people have halted their spending habits and inadvertently put the real estate market in a strangle hold.
With foreclosure numbers soaring the banks are taking over many distressed properties and auctioning them off to the public at prices that are well below the present market values of the homes. In some states the foreclosure problem has become so widespread that bargain priced houses are beginning to saturate the market and drive the cost of resale homes down. Home values across the nation have been affected by the economic turmoil of the federal housing bailout as banks and mortgage lenders that made bad loans to sub prime credit holders left the housing market flat.
For a great many of the sub prime homeowners the fall in market pricing combined with the rising federal unemployment rate caused then to take a closer look at what they were spending each month on their mortgages and realizing that as the wave of unemployment reached close to home that they could not afford to keep the houses that they in reality could not afford to purchase in the first place. As money grew tighter for the sub prime mortgage owners they stopped making their monthly house payments and quickly fell behind in their mortgages and faced the looming threat of foreclosure.
Many of the homes for sale on the market today are listed by people that are attempting to escape from the burden of debt that they have incurred and fallen behind with their payments in. In a last ditch effort to save some of their remaining dignity these people have put their homes up for sale before the foreclosure and auction of their home takes affect by the mortgage holders. The majority of houses for sale in almost every state across the country are either on the market because the homeowners are trying to sell before they lose their homes or are foreclosure properties that have already been taken over by the bank and are being sold to cover the amount of a defaulted on loan. In both cases the homes for sale are being offered at discounted prices for quicker sales to occur.
The banks and mortgage companies that have received federal bailout money appear to have learned their lesson not to make loans to people that lack the income to repay them, and have tighten up their lending practices to allow only higher credit scoring individuals with proven income levels to qualify for home mortgages. For those have been waiting for conditions to buy to right now is the time. The real estate market across the country is full of houses for sale that are being offered below market value, allowing homebuyers to move into a home with equity already established in the property.
For buyers that do qualify for new mortgages the federal government has issued a tax credit of $8,000 as an incentive for people to buy a house. There are certain stipulations to the tax credit, but essentially the federal tax incentive is for first time homebuyers that have not bought a house in the past three years. The one time tax credit was initially offered as a no interest loan of $7500 to first time homebuyers last year. At the time it was initiated qualifying homeowners were required to repay the loan at $500 a year as an addition to their tax filing, however just this year the federal loan was adjusted to an $8,000 tax credit that does not have to be repaid ever. The changes to the tax credit took place as the president took steps to jumpstart the economy and stimulate consumer spending and confidence in the economy.
With the combination of lower priced houses for sale and the economic stimulus of the federal housing tax credit new homebuyers are well positioned to buy their first home and help in the healing of economic recovery. But the good news for prospective homebuyers does not end there. Because the economy is a state of flux the stock and bond markets are down. Because the stock and bond markets directly effect consumer confidence and spending they are tired to the federal bank in establishing current interest rates and inflation. With the markets in a slump interest rates have fallen to lows that have not been seen in close to 50 years. Although the markets fluctuate daily the current interest rates for new mortgages, not refinances, is hovering between 4.25 and 5.5 percent.
The all time low interest rates that are available for new mortgages, combined with the $8,000 federal tax credit and the below market value pricing of houses for sale make this the best time to buy a home. The foreclosure market may be on the rise, but as the number of bank owned properties continue to flood into the real estate market the number of more affordable homes for sale increases. The downside to all of this may be that the stock and bond markets are beginning to rally and interest rates could soon be on the rise and the federal tax credit allowance of $8,000 is currently only good through the end of September of 2009.
In order to find and make the best possible deal on a house that is for sale either as a resale home of as a bank owned foreclosure buyers need to in touch with a real estate agent that can safely guide them through all of the pitfalls and paperwork associated with buying a home. Finding an honest, reputable real estate agent to represent the buyer and negotiate on their behalf is simply a matter of doing a little research on the internet. However it is important to note that time is of the essence as the economic recovery of America is underway and homes for sales may soon see increases in pricing as the market bounces back.
re/max alabama (http://www.remax-alabama.com/)provides buyers and sellers with real estate maximums quality professional service. art gib is a freelance writer.
