First-Time Home Buyers

Many people find it difficult to sort through the barrage of real estate statistics. After all, there are real estate numbers released on a quarterly, monthly, bi-weekly, and even weekly basis. Potential home buyers and home sellers must wade though scores of information before making a final decision.

Confusing Stats

It is not surprising that real estate numbers can be a confusing lot. After all, real estate is full of statistics. Remember Mark Twain's classic quote.

"There are three kinds of lies: lies, damned lies, and statistics." ~ Mark Twain.

No doubt, statistics have a questionable reputation. Generally, they are not 'lies' but Mark Twain (and others who have used this quote or a similar version) was probably referring to the persuasive power of numbers. Statistics can be used to bolster weak arguments. On the other hand, they might be dismissed by people on the opposing side of the statistics.

In addition, there is the odd journalist who goes out of their way to make an extraordinary headline out of ordinary statistics. Writers need to grab the readers' attention. Shocking or scary statistics are bound to garner interest and publications are not blind to that fact.

If there were 4,000 home sales in October and 3,800 home purchases in November, readers can expect the headline – Home Sales in Definite Decline. The journalist has published correct information. In this fictional example, home sales declined in November but the article might leave out a few important numbers. The author might not refer to the 5,200 sales in September or the 3,700 home purchases in August.

Statistics show the facts but they can hide the 'ebb and flow' of events. Long-term effects can be influenced by several external factors. A short-term statistic shows a more narrow perspective. They represent the "here and now."

Long-Term Commitment

Home buyers and sellers are facing decisions with long-term effects. They have to take a look at today's statistics but they must also examine tomorrow's outlook and future possibilities. A long term commitment requires exploring a broader range of statistics than this week's numbers. Home buyers and sellers must decipher overall trends and year-to-year comparisons.

They should view and review real estate statistics. Buying a house is a serious decision because you are buying "your home." Even if you are just looking at a home purchase as an investment, it requires commitment. If you hold on to the house for the long term, it can be a worthwhile investment – no matter which shocking statistics appear in the interim.

Through extensive research, individuals can get a better feel for the real estate market. Buyers and sellers need to ignore all the hype and stick with the basics. For example, a home buyer should be able to answer 'yes' to a few basic questions before they decide on home ownership.

Basic Questions for Home Buyers

• Do you have a good credit score? 
• Do you have a steady job or career? 
• Do you have a stable income? 
• Do you plan on being in this location for more than 4 years? 
• If you own a home, have you owned it for longer than 5 years?

WHAT DO THESE TORONTO REAL ESTATE NUMBERS MEAN, ANYWAY?

Are You Ever Confused By Real Estate Statistics?

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Real estate flipping refers to buying low and selling at a higher price. With the typical "fix and flip," an investor will buy a home selling for a low (often, very low) price. The deep discount in the home's purchase price may have come about for varied reasons from a state of disrepair to home owners' divorce to pending foreclosure.

Flipping Homes for Good Reasons

The investor will perform any necessary repairs and put the house back on the market in the hopes of making a profit. There is nothing wrong with this scenario if everything is carried out in a proper manner. In fact, the transaction can have a positive effect on many levels.

The home seller gets rid of the home. Obviously, the seller wanted (or had to sell) the house. The sale can free sellers to relocate or move on with their lives as in the case of divorce. Even with the stressful process of foreclosure, the actual sale puts an end to the stress of 'pending' foreclosure. It allows people to move forward in a new direction.

An investor puts an improved home on the market. That process has general overall benefits to the economy. The renovation companies and building suppliers get business. The neighbourhood gets a nicer home and a bonus - increased property values. Even the system gains with higher property tax assessment value and sales tax on the renovation supplies.

Flipping Homes for Bad Reasons

Yet sometimes flipping homes can either border on fraud or be all-out fraud. Flipping homes can be part of a criminal scheme. The investor in illegal property flipping is not concerned with home buyers, the neighborhood, or even making a reasonable profit through honest efforts.

Illegal flipping is a 'fraud-for-profit' scheme. The investor acquires property and resells it for a considerable profit at an artificially inflated value. The property is put back on the market in record time.

If the home required repairs, they either will not be completed or will just undergo a superficial fix. The new buyer may not be aware of the situation. The buyer borrows to finance the purchase and the lender gets drawn into the fiasco. This type of fraud is costly for lenders because it involves a substantial loss.

Of course, an illegal property 'flipper' needs help to carry out the scheme. Illegal property flipping usually requires collusion between an investor, real estate appraiser, mortgage originator, and closing agent. The appraiser plays a big part in the scam. A false and artificially inflated appraisal is necessary for the successful completion of this criminal scheme.

When Flipping Homes Turns Ugly

Illegal property flipping can end up in an ugly mess. One example would be the recent complaint filed in Manhattan federal court on December 14 against sellers, appraisers, and even lenders. All parties allegedly conspired to commit mortgage fraud.

According to the current civil lawsuit, sellers allegedly purchased 17 homes and 'flipped' them without proper improvement to inexperienced, low-income buyers who could not afford the properties. The appraisers allegedly overstated the value of these homes in their appraisal reports. As well, a mortgage lender allegedly underwrote mortgages for the buyers with the knowledge of the false appraisals and inability of the buyers to afford the mortgage payments.

Read more about what happens when flipping homes turns ugly....

Have You Been The Victim Of Illegal Property Flipping?

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Unless you are in a hot climate, November and December can be chilly months. This year, parts of the US and the UK are living through an early winter. Home sellers in these countries have also been experiencing a chilly period.

Los Angeles

Although Los Angeles might have warm temperatures, there has been a cooling down period in the housing market. During November 2010, the Los Angeles County housing market saw quite a slowdown. Home sales fell 21% compared to purchases in 2009. Condos sales had even a worse showing. Last year, 4,315 homes had sold in this region throughout November. Only 3,423 homes were purchased during the same period in the current year.

Sales were down 9% from October. Often home sales will decline somewhat in late autumn as the market heads towards winter. Yet the median price in Los Angeles County did not show much movement. In fact, median price was at almost the same place as in summer.

In a November 23 report, the California Association of Realtors suggested that the average home seller is not prepared for these chilly times. The housing market is in the midst of change. People must be willing to participate in a different game on an unfamiliar playing field. Leslie Appleton-Young, association chief economist, explains the "new reality."

"We're really seeing two different housing markets: one at the lower end driven by first-time buyers and investors, which is keeping prices stable, and one with nostalgic sellers who set unrealistic asking prices," says Leslie Appleton-Young, chief economist of the California Association of Realtors.

As well, Michael Nourmand, president of residential brokerage Nourmand & Associates, has noticed that buyers and sellers are finding it hard to adjust to a new market. Home sellers tend to think about the previous popularity of an area or earlier neighborhood prices. Yet sellers must think in the "here and now." In uncertain times, affordable options (such as fixer-uppers) are a big draw.

November Ushers In a Big Chill for Home Sellers

UK

In the UK, home sellers cut asking prices by 3% in December. These figures represent the worst December performance for home sale prices in three years. The statistics show the steepest decline since the 3.2% drop in 2007. Home purchase prices have now fallen during five of the past six months in all regions of England and Wales. The West Midlands saw the worst fall at 5% but Wales escaped with a mere 1.3% decline.

Despite a demand for homes and interest in quality homes and popular neighborhoods, dreams do not always translate into actual sales. Negative factors can come in to play to outweigh positive circumstances. Miles Shipside, director of Rightmove, explains part of the problem in the current UK housing market.

"The fact that many would-be buyers do not have the ability to proceed, and some homeowners find themselves in a position where they are forced to sell, drives prices down," states Miles Shipside, director of Rightmove.

Rightmove believes national home sales prices will at least remain flat in 2011. In fact, they predict the worst scenario could be a 5% decline because many homeowners are facing repossessions.

Home Sellers Forced To Slash Asking Prices

Are Home Sale Prices Experiencing A Chill In Your Neighborhood?

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Home buyers might expect to purchase a foreclosure for a bargain. Yet probably few buyers would be hoping for a 45% discount. According to Realty Trac, however, sales prices for Ohio foreclosures reached that low point in the third quarter of 2010.

Falling Prices

Purchase prices for foreclosures did not fall to that extent in every state. Yet foreclosures sold on the average for 32% less than non-foreclosure sales. In the second quarter, foreclosures sold for just 26% less than other homes. They could be purchased for 29% less in 2009. Realty Trac CEO, James Saccacio, said that he had never seen such disparity in prices of foreclosures and non-foreclosures since 2005.

The overall best deals went to buyers who picked up REOs (real estate owned by the bank after repossession). REOs were selling 41% lower than non-foreclosures in the summer and early autumn of the current year. That percentage means that a $300,000 foreclosure was selling for $177,000. A huge discount!

Distressed Properties

Of course, REOs may not be in prime condition. That factor is at play in the discount prices for certain foreclosure sales. Home buyers must always be realistic about purchasing distressed properties. These homes will need extra tender loving care – an investment of time, effort, and money. Home buyers must understand the implications of buying homes in less-than-mint condition.

If buyers are willing to take on the challenge, however, they will be getting a good deal in the current market. While the average price of homes rose 6.4% from the second to third quarter in 2010, distressed property prices fell 2.5%. Non-foreclosure sale prices rose to an average of $250,000 and foreclosure purchase prices fell to $170,000.

Behind the Scene

Home sales had dropped after the end of the Federal Homebuyers' Tax Credit. As well, more foreclosures came on the market. Buyers had plenty of choices. If homes were not set at favorable prices, they could just sit on the market for an indefinite period.

Getting Rid of REOs

REOs have been returned to lenders but they are still eager to get rid of the properties. REOs come with a cost for bankers. Actually, lenders would prefer to take a low price rather than carry the cost of the home for months.

Buy A Foreclosure - Save 30% On The Price

REO Statistics

Even with the deeply-discounted prices, however, REO sales dropped during the third quarter. Since home sales also fell, foreclosures still occupy the same share of the market. Yet REOs remained popular with many home buyers.

Nevada had the highest percentage (54%) of REO sales in the third quarter of this year. Yet these figures were 2% lower than sales for the second quarter. Other states also showed high numbers of foreclosure sales. In Arizona, foreclosures accounted for 47% of home sales. Foreclosures within California made up 40% of all home purchases.

In Massachusetts, more than one third of home sales during July-September were foreclosures. The fourth quarter statistics will be released in the new year. These figures will reflect the impact of the robo-signing fiasco.

Already dirt cheap, foreclosure prices dive

Will You Be Taking Advantage Of The Falling Prices Of Foreclosures?

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Buying or renting? The age-old question! Making that important decision is challenging in the best of times. Yet when the country is recovering from an economic downturn, people can lack confidence and be more uncertain about the right choice.

Does Buying A Home Make Financial Sense?

According to a recent National Association of Realtors survey, 85% of home buyers between June 2009 and July 2010 believed that they were making a sound financial decision. Almost 50% of the buyers and sellers in the survey considered their home to be a better investment than stocks. Nearly one third of the group believed their home to be an investment ranking at least on par with stocks. The findings were similar among all categories of buyers (first-time buyers or existing home owners, couples or individuals, male or female).

Will Home Ownership Be A 'Get Rich Quick' Investment?

In earlier decades, many buyers viewed home ownership in that light. That perception is changing in the current market. The median expected length that today's home owners will stay in a residence is 10 years. Generally, repeat buyers plan to remain in the same residence for 15 years. Of course, these long-time home owners can still turn a profit further down the road.

Should I Rent Or Should I Buy A Home?

There is no simple answer to this question. Reaching a final decision means that individuals have to examine their own situation from every angle. They must consider their goals, circumstances, and even one's personality.

Certain people prefer to be renters. They do not want to take on the responsibility of home ownership. If there is a problem as a renter, they can call the landlord. Renters without signed leases are able to move at a moment's notice. Some people enjoy that sense of freedom.

Yet other renters (especially with families) long for home ownership. Renters must have certain specifics in place if they are planning to buy a home. They should have a down payment and closing costs.

Potential home buyers will need to qualify for a mortgage. As well, they must be able to afford the cost of buying a home. Home ownership costs include more than the purchase price. Homeowners must be able to pay the monthly mortgage costs, property taxes and insurance, as well as maintenance costs.

Making The Final Decision

People have to examine their personal circumstances before they decide to rent a residence or buy a home. They must consider the pros and cons of each option. There is help out there to assist individuals with this process. It is possible to find classes in different locations that are focused on exploring the "buy or not to buy decision."

Various real estate professionals have written e-courses or organized classes about renting versus home buying. In addition, there are similar programs created and run by groups or businesses with no vested interest in trying to sell homes. People can get expert help to guide them in making the right decision.

Should you buy or keep renting?

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U.S. homeowners have only until December 31, 2010 to take advantage of the current Residential Energy Property Credit. This 'green' program is available to home owners who make energy-efficient improvements to their houses. New homes or rentals are not eligible for this credit and the home must be the person's principal residence.

Federal Tax Credit

This property credit is about to expire and qualifying items must be bought and installed before the end of 2010. People can make purchases such as heating and cooling systems, insulation, roofing, windows and doors, water heaters, and biomass stoves. The credit is a dollar-to-dollar reduction on the amount of tax owed and home owners can receive up to 30% of the cost – up to $1500 per home. Two or more unmarried people living in the same home with joint ownership are each eligible for the tax credit on money spent for improvements. Yet the total credit cannot exceed $1500 for a single home.

The credit includes installation costs in certain categories but not for all purchases. For example, installation costs are covered for heating, ventilating, and air conditioning (HVAC). The tax credit, however, does not include installation costs for insulation. As well, not all ENERGY STAR qualified products are included in this initiative. Homeowners are advised to check out the rules of eligibility for this credit.

Associated Components

People are wondering if the tax credit applies to components associated with a product. If a homeowner purchases a biomass stove, will the cost of a hearth, stovepipe, and chimney be eligible for the credit? The IRS administers this program and they have not issued any written guidelines about eligible components.

Homeowners can contact the IRS for the official word. Yet it has been widely suggested informally that components are covered if they are critical pieces of the product's energy efficiency. If the component can be used with a non-qualified product, it does not meet eligibility guidelines for this credit.

How To Apply

For products installed in 2010, homeowners must file the IRS Form 5695. They must submit the form with their 2010 taxes by April 15, 2011. Homeowners must save receipts and the Manufacturer's Certification Statement for their records. A Manufacturer’s Certification Statement is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. Manufacturers should provide these certifications on their website.

Income Limit

There is no income limit with this program but it is a 'non-refundable' credit. Homeowners' credits cannot exceed their tax liability (the amount they pay in taxes).

Future Energy

If a homeowner cannot make the December 31 deadline, there are other opportunities to take advantage of energy-efficiency programs. Indeed, new homes and second homes (as well as existing homes) are considered for a tax credit in two additional incentives. The programs vary and cover from 30% of the cost with no upper limit to 30% of the cost and up to $500 per .5 kW of power capacity. These credits do not expire until December 31, 2016. Learn more about Federal Tax Credits for Consumer Energy Efficiency.

Last chance for homeowners to get green tax credit

Have You Applied For The Residential Energy Property Credit?

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Holiday tidings – home mortgage rates are holding their own. Last week, there was a spike but - according to Freddie Mac – hardly any change this week on fixed-rate mortgages. Based on the weekly survey of mortgage rates, we are in a period of stabilization – a positive sign for the economy.

Home mortgage interest rates had been declining in past months because of economic uncertainty. Yet earlier this month, there was a change. Home mortgage interest rates have increased recently and last week's mortgage rates took a jump. Stabilization, however, is the reality for the week ending November 24.

Home Mortgage Rates

Rates on 30-year fixed-rate mortgages averaged 4.4% on November 24. That rate is just a slight increase over last week's rate; 4.39% was the rate for the previous week. Freddie Mac mortgage rates have increased for the past four consecutive weeks. The rate averaged 4.78% in 2009.

Fifteen-year fixed-rate mortgages averaged 3.77% this week - compared to 3.76% in the previous week and 4.20% last year. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.45% this week - up from 3.4% in the preceding week. The ARM averaged 4.18% in 2009.

Obtaining Rates

To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.8 point. The 15-year fixed-rate mortgage required an average 0.7 point and both ARMs required an average 0.6 point. A point is 1% of the mortgage amount charged by the bank as a prepaid mortgage interest.

Freddie Mac

Frank Nothaft, vice president and chief economist at Freddie Mac, released promising news on varied fronts on Wednesday. He noted an improvement in home owner balance sheets as well as a decrease in mortgage delinquency rates in the third quarter of 2010. Actually, there has been an overall decrease in delinquency rates. They have fallen to 9.13% - the lowest rate since the first quarter of 2009. Freddie Mac's chief economist also mentioned other encouraging signs for the economy."Growth in gross domestic product in the third quarter was revised up from the initial estimate to an annualized rate of 2.5%, as stronger consumer spending and exports supported the revision," says Frank Nothaft, vice president and chief economist at Freddie Mac.

Home Mortgage Interest Rates Stabilize This Week

Wells Fargo

Wells Fargo also showed stabilization after a volatile couple of weeks. Mortgage rates have been moving around but the movement has been limited to only a certain level. Check out more specifics about Wells Fargo and mortgage rates. It will be easier to make more long term projections if mortgage rates remain stable so that we can determine effectively the overall scope. Industry experts believe that home values will not stabilize completely until the end of 2011 or middle of 2012.

Housing Market

Looking ahead to 2011, some industry leaders say that potential home buyers and homeowners wanting to refinance should experience favorable conditions in the coming months. Analysis seems to suggest that rates will stay below 5% - at least until mid-2011. Home buyers are expected to be lured back into the housing market with low mortgage rates, affordable house prices, and improving employment figures.

Housing Forecast for 2011

What Is Your Prediction For The Housing Market In 2011?

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Black Friday shopping is no longer only about televisions, toys, and other terrific (and cheap) merchandise. Potential home buyers are just as likely to get a Black Friday deal on a new home as the latest laptop. There are real estate deals to be made on this busiest shopping day of the year.

After all, buying a home qualifies as a significant purchase and long term commitment. Why shouldn't home buyers be able to enjoy a holiday sale? Actually, if you check today's realtor websites and housing blogs, it is not that uncommon to see a home profile and a Black Friday notice side-by-side.

Buying a Home on Black Friday

More Shoppers – Fewer Buyers

While almost everyone else is checking out the e-reader specials, the alert home buyer can be chatting with home sellers. Generally, houses are not on the market in the holiday season unless home owners are serious about selling their home. Otherwise, they would be putting their efforts into holiday shopping or seasonal decorating.

The timing is perfect for an enthusiastic buyer. Interested sellers are waiting and there is less competition for home buyers on Black Friday. Many potential buyers browse though the stores instead of the real estate market.

Buyer's Market

Of course, every day in this holiday season is shaping up to be a buyer's market. Prices are favorable for buyers - although sale prices will vary in different markets. Home sellers, however, are cutting their prices. The statistics at Trulia.com show a common trend in the real estate industry.

"Twenty-seven percent of homes listed for sale on Trulia as of November 1st had had at least one price cut - in some cities, 33 percent, 39 percent - even 46 percent of the homes for sale had already been discounted by their sellers." ~ Tara-Nicholle Nelson, Trulia.com

Sale Prices

If a home buyer can snag that Black Friday 'sale' on a new home, they will also save on property taxes. Since property taxes (in most instances) are tied to the purchase price of a home, sale prices mean tax savings.

Holiday Spirit

If a home buyer finds their dream home on Black Friday, it is perfect timing to suggest a few 'included' deals. Often retailers add a bonus item with a Black Friday purchase. Home sellers might be prepared to follow suit - in the spirit of the season.

A home buyer might love a few furniture pieces. Maybe the seller will include them in the purchase. Such a deal is really not far-fetched because sellers in the holiday season want to sell their homes. As well, home owners have been known to include items with the sale of their house. In fact, one Connecticut home seller threw in a vacation property to sell his home.

Yet buyers can probably lower their sights to 'inclusions' being a piece of furniture rather than a full-scale property. Home sellers might be willing to include select items in the sale. Buyers must check out the situation, however, with their broker or agent and mortgage expert. 'Included items' must fit within lender and appraisal guidelines.

If you are committed to buying a home, Black Friday might be the best day to shop around for a good deal. Actually, anytime during the extended weekend is a great time to look for a new home. Just like with retailers, there is an opportunity to get a deal in the days following Black Friday. If you are a home buyer at this time of year, you could really be "home for the holidays."

5 Ways Real Estate is on Sale This Black Friday

Non-traditional Black Friday Deals

Will You Be Buying A Home On Black Friday?

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The Federal First-Time Home Buyers' Tax Credit has expired but there is still help out there for first-timers. No doubt, the federal tax credit had encouraged people to become home owners and increased home sales. When this assistance ended, sales fell flat and first-time home buyers turned to other sources of help including 'angel investors' (family and friends). Yet there are still 'official' programs in place for first-time home buyers – at least on the municipal level.

Visalia, California

The City of Visalia, CA, is in the habit of helping home buyers. The city has offered assistance for home renovation as well as help with housing for lower-income, working families. Now Visalia is throwing its support (and funding) behind first-time homebuyers. The details of this latest program were spelled out in a recent city report.

"First-time homebuyers or those who have not owned a home in the last three years may be eligible to receive as much as $20,000 to help purchase a brand-new home with a maximum purchase price of $200,000," stated a City Of Visalia report released on November 19, 2010.

Workshops are planned for December 11 allowing Visalia residents to learn more about the program. The city is being supportive of their first-time homebuyers but, ultimately, there is a hope that the initiative will have a positive effect on Visalia's economy. The city expects that first-time home buyer assistance will encourage building in already-approved subdivisions. The program is expected to inspire first-timers and inject energy into the local housing market.

Visalia, builders to aid homebuyers with $20k stimulus program

Cambridge, Massachusetts

The Cambridge Financial Assistance Program offers a grant to potential first-time home buyers. This program helps with their down payment and closing costs. The home must be the buyer's primary residence. As well, the buyer must agree to restrictions limiting the sale of the property. Buyers must have been lived in Cambridge for at least one year.

Applicants must reveal their gross family income, amount of monthly debt, savings for a down payment, and the estimated purchase price of the property. A financial assistance program also allows eligible first-time homebuyers to “buydown” the purchase price of a home. Applications are available through the Cambridge Community Development Office.

Taunton, Massachusetts

The city of Taunton, MA, assists eligible home buyers with down payments (half of 5% down payment cost) and closing costs (up to $10,000). Eligibility is tied to income guidelines set forth by HUD (Housing and Urban Development Department). Applicants must have proof of income and debt. In addition, they must attend pre-purchase and post-purchase home buyer training courses. Applicants must be planning to reside at the property.

First-Time Home Buyer Grants in Massachusetts

Minneapolis, Minnesota

Minneapolis, MN, offers various first-time home buyer programs. The Minneapolis Advantage Program (MAP) offers a $10,000, zero-percent interest loan that is forgiven over five years. The Home Ownership Works (HOW) program gives first-time home buyers an opportunity to move into recently remodeled homes. Check out other programs for first-time home buyers in Minneapolis.

Nationwide

There are excellent programs available across the country for first-time home buyers. The guidelines may vary slightly according to the municipality. Generally, the programs are available to first-time buyers or those who have not owned a home within three years.

Most municipal programs are available on a first-come, first-served basis. The best advice for first-time home buyers is to check into these initiatives at the earliest possible date. Funds can run out for municipal programs. When cities reissue funds for a program, they may change its rates and parameters.

Have You Received Help Through A First-Time Home Buyers' Program?

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Did last month's 'foreclosure freeze' cool down or heat up the real estate market? Just over a month ago, most US states agreed to a freeze on foreclosures in response to suspected flawed practices by lenders. Apparently, certain lending officials were 'robo-signing' foreclosure documents. They were signing off on foreclosures without reading the information. The moratorium got mixed reviews from icy stares to warm welcomes.

Out in the Cold

Of course, some US home owners were left out of the loop altogether when it came to the foreclosure freeze. In early October, Bank of America, JP Morgan Chase, and Ally Financial (parent of GMAC Mortgage) said that they would suspend foreclosures to investigate 'robo-signing' – but not in every state. For example, Texas foreclosures were not on the list for review.

Uncertain Future

When these major lenders announced their intentions, they included 'judicial foreclosure' states. Texas has 'judicial foreclosures' (foreclosures carried out by the state) and non-judicial foreclosures. Therefore, Texas was not part of the voluntary suspension.

As a result, many Texas home owners were uncertain about the entire process. They were advised to contact their lenders but flawed foreclosures did not have to be frozen in this state. Robert Gleason, Director of Governmental Affairs, commented on the uncertainty that faced Texas home owners.

"Many homeowners will have to wait until next year to be able to see if this pause on foreclosures affected their home values, but in the current market, it is a possibility," says Robert Gleason, Director of Governmental Affairs.

Foreclosure freeze could chill local market

Hot Market

If a home owner was involved in a conventional sale (not a foreclosure or short sale), the freeze might have freed up more possibilities. Keep in mind that foreclosures had been responsible for up to 30% of all sales in certain areas. With foreclosed properties off the market, conventional sales faced less competition.

Foreclosure sales in Tampa Bay, Florida, fell 9.3% in October. In an interesting but not surprising twist, conventional sales experienced an identical (9.3%) increase. Tampa Bay figures were repeated in varying degrees across the country.

The foreclosure freeze heated up conventional sales. Yet the moratorium did not change everything in the home seller's favor. House prices did not increase to benefit home sellers. Actually, prices for conventional sales were 2.2% lower than in October 2009.

Analysis: foreclosure freeze helped home sellers.

Cold Comfort

As well, a few home sellers ran into additional problems with the foreclosure freeze. They sold their home with the hopes of moving in elsewhere. In specific cases, their new house was tied up in the moratorium. Home sellers could make quick sales during the freeze. Moving in, however, took longer than expected in the aftermath of the 'robo-signing' fiasco.

Cooling Down

In addition, the foreclosure freeze had a downside on various levels. The longer a home just sits there, the less value it has, and the more detrimental effect on home values in the neighborhood. Besides decreasing prices, the freeze cooled more than one person's enthusiasm for the market.

Potential home buyers entered up in a quandary. Some buyers have been caught 'in the process' of buying for more than a year. Home buyers have discovered that it is not always easy to buy a home. Especially in the autumn chill caused by the foreclosure freeze!

Foreclosure halt affecting Berks' listings

How Has The Foreclosure Freeze Affected You?

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