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2008 Spring Real Estate Market

By
Mortgage and Lending with The Manor Enterprises

  

For the past couple of Spring seasons, the real estate market has been in a slow, steady decline.  Prices stopped rising at the breakneck pace that we have become accustomed to during 2001 - 2005.  Based on that frame of reference, any reversal in appreciation started to look like the deal.

But something seems different about the coming Spring of 2008.  I am beginning to see price reductions unlike what has occurred in the past 2 years.  It seems like the true reality of the real estate market is finally starting to sink in.  I have witnessed price reductions of 25% to 50% of previous purchase prices, which was usually during 2005 - 2006.  You may be wondering how a homeowner is able to take such a hit to unload a home.  Well, it is not the homeowner directly taking the hit.  These steep discounts have been due to what are called short sales.  A short sale is when a lender agrees to sell a home at less than the mortgage balance, just to write-off the loss and avoid a costly foreclosure.  The homeowner avoids going into foreclosure, but may have other tax implications connected to the sale of the home.  These short sales are becoming more common as foreclosures rise and are offering significant discounts for buyers.    

  

Anyone in the market to buy a home should consider concentrating on these short sales in order to get the best value for their money.  No one truly knows how low home prices will fall, but they are definitely hitting very attractive levels for the savvy buyer.