As the nation struggles with an ailing economy, housing markets all over the U.S. are experiencing the biggest buyers markets in decades. The inventory of homes listed for sale by real estate agents has shrunk, but a growing inventory of foreclosures offered for sale else where is becoming larger.
The real estate depression has produced a record epidemic of foreclosures, estimated at more than 4-million homes taken back by the banks so far as bankers attempt to unload properties in a variety of new ways. Foreclosure auctions have welcomed home buyers in record numbers and the number of new listings on web sites like RealtyStore.com offering foreclosure listings is increasing daily. Some 577,720 foreclosures are listed nationwide, many of which are not for sale with real estate agents as lenders try to unload properties, including auctions on the Internet.
Home prices have dropped as much as 70% from the markets peak in California, Michigan, Ohio, Nevada, Florida and Virginia among other states, producing an over-supply of homes for buyers to select. The U.S. Census Bureau says a record 16 million homes are vacant, including newly constructed houses and the inventory is growing as banks seize homes faster than they can resell properties.
So how do you know when it is a good time to buy? Frank Spaulding, a real estate economist in Boston, Massachusetts says, “It’s better to buy when the market is falling than to make a purchase when prices are rising in a mania. Buyers have the upper-hand when there are more homes to choose from on the market and you can negotiate to get an even better deal. The free-fall won’t last forever.”
The worst housing depression since the Great Depression has produced the highest level of homes for sale in the country’s history. Foreclosures are hammering home values in most areas, and are providing the biggest inventory of housing for buyers since records have been kept.
Home sales have increased from 2008 levels markedly in California and Florida, the two states that entered deflationary cycles the earliest and home lending is beginning to show improvement in some areas. However, the majority of buyers still seem to be waiting on the sidelines for prices to bottom, despite the new $8,000 credit for new homeowners from the federal government.
Real estate analysts contend many are waiting to see what else the new Obama Administration will do to stabilize markets before buying. The volume of homes sales, however, in California and Florida is projected to increase as we move into the historically prime spring and summer selling season.
In hard hit California, a state tax credit worth up to $10,000 started this week to entice buyers back into the marketplace, which could serve as a model for other states facing similar hardships. It applies to new single-family homes, condominiums and townhouses that close by the end of February, 2010. The additional $8,000 first time buyer federal credit is also being offered to Californians.
The state credit equates to five percent of the purchase price up to as much as $10,000, which will be paid out over three years.