Real Estate News- Why The Housing Market Is Likely To Take More Time To Recover:

1. While low-end homes are moving, moderate to high-end homes are not having the same progress. Low-end homes have been selling to owner/users as they have been enjoying low prices, tax credits and with new homes, more incentives from builders. Investors have also been jumping into this market largely with cash buying multiple properties.
Higher-end home prices have not adjusted to the same degree as low-end homes in since moderate to high-end homeowners have been more able to be more stubborn with their price. Nevertheless, these days even these Sellers realize they must price aggressively to sell and some of these homeowners are now struggling to keep their homes or have lost their home to foreclosure.
2. Financing has been a tremendous challenge for many buyers and has kept many from buying today. When rates go up the buyer pool will most probably be further reduced. This may result in lower demand and even lower prices.
3. Banks have kept homes off the market (shadow inventory) and have worked with borrowers to do modifications but the historical rate of re-defaults within a 12 month period is about 50 percent. This means many of these borrowers will need assistance again or end up leaving their home.
4. People are still cautious since they have experienced a loss of wealth or know someone that has experienced great losses in real estate. In this economy, some are still hesitating to commit to a large investment, others have to rebuild their credit and their savings to qualify today.
5. If Lenders wish to reduce principal then they should decide that on a case by case basis and not be required to do so by the government. Lenders have been making adjustments and the government using taxpayer money in this area may do more harm than good.
6. We have an excessive supply of homes. The current number of vacant homes is 10 percent compared to an average of 2.2 percent!

IN CLOSING

A home should be considered a LONG TERM INVESTMENT. You do not have to buy at the very bottom to do well with a long term investment. You do need to know that you can AFFORD to carry that investment long term.

Buyers are out there buying and fighting for properties in many areas because they see that the cost to replace is much higher than the price to purchase. Investors see that they can break even or turn a profit when they rent these properties! Most importantly, every buyer needs good advice and someone experienced to guide them. It is now very clear that buying a home should be carefully considered and if this is done, long term, you should do well buying.

Here's something to keep in mind. Most homeowners have lost equity but are in no danger of foreclosure. Many have used their home's equity to finance their children's education and have acquired wealth for retirement. Again, as with any investment, you need to have a certain amount of knowledge to do well. Realtors are out there every day sharing knowledge. Find the right Realtor or advisor and be responsible.