Money Saving Tips for Real Estate Home Buyers

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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According to the National Association of Realtors' annual Profile of Home Buyers and Sellers survey, the current housing market is a kinder, gentler environment for first-timers. That result might surprise a few Americans who wonder about the 'when and how' of market recovery. Coupled with uncertainty about the market, first-time home buyers can no longer take advantage of the First-Time Home Buyers' Tax Credit.

Home Buyers

Yet first-time home buyers are buying in this market. Fifty percent of home sales between July 2009 and June 2010 can be attributed to first-time home buyers. Only 47% of home sales in the previous year were made to first-timers.

Why are there so many first-time home buyers - despite the obvious challenges? Apparently, they are getting help from a group referred to often as 'angel investors' – family and friends. These 'angels' are not only encouraging first-time buyers but they are providing down payments.

Family and Friends

According to this recent survey of 8,449 home buyers, 27% of first-time buyers between July 2009 and June 2010 received a gift from family or friends to help with their down payment. That percentage is up by five points over the previous year and now stands at the highest in more than 20 years.

Nine per cent of first-time buyers in this 2010 National Association of Realtors' survey received a loan from relatives or friends. According to NAR, only 6% of first-time buyers in last year's results went that route. The reason why family and friends want to help is a timeless one. It's about family and friends! In fact, a little help extended to loved ones in the housing market is not a new phenomenon. The degree of help – the number of people offering assistance and the number of buyers accepting – is the astounding statistic.

The more eye-popping revelation revolves around why first-timers need help. Is the present housing market so unfriendly to first-time buyers? Actually, without an 'angel' or two at your side, the housing market can be an intimidating place for a home buyer. A study of all types of home buyers looking for a mortgage shows that people find the process to be a difficult one. Forty percent of all buyers and 42% of first-time home buyers were surprised by the complicated challenges encountered along the way.

First-Time Home Buyers – The Challenges

• The First-Time Home Buyers Tax Credit is past its expiry date.
• Even with low mortgage rates, today's homes cost a substantial sum.
• 'No-down-payment mortgages' do not exist in the current marketplace.
• First-time home buyers need a significant down payment – even if they have good credit.
• Banks and lenders have strict standards.
• Financing is a problem if a potential buyer does not have a favorable credit score.
• Lenders have a 'one size fits all' approach – lack of consideration for individual circumstances.

Family and friends step in where lenders leave off and lack of consideration is replaced by consideration and support. Yet the reality is that despite their best intentions, many families and friends are not in a position to help first-time home buyers. This group of first-timers will be examining the housing market carefully before they enter into any transactions. If you have the means and qualifications, however, James J. Driscoll, with Auburn Sherlock Homes Real Estate in Auburn, N.Y., makes a good case for buying a home.

"..If a person's choice was between a $1,000 rent and a $650 mortgage payment, why wouldn't you buy if you're qualified and have the means to make the purchase," says James J. Driscoll, with Auburn Sherlock Homes Real Estate.

CONSUMER FINANCE: Housing-Market Bust Changes Buyer Behavior

Are You Planning To Buy A New Home?

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Home buyers need to check out their potential homes and that involves more than sizing up the living room colors. They must get down to the basics. In fact, home buyers should check out the foundation and every structural issue between that point and the roof. Enter the home inspector!

Home Inspections

A home inspector can check the home's structure as well as the plumbing, electrical, heating, and air conditioning systems. They will check for fire and safety issues, major problems, and general maintenance concerns. If a home inspector has the specific qualifications, inspections can include everything from water quality to mould, as well as septic and private well inspections, and even checks for WDI (wood destroying insects). Not all home inspectors are experts on every issue, however, such as septic inspections, radon testing, and other specialty areas.

Of course, home inspectors cannot guarantee that they will discover every defect or predict every future issue. Yet a qualified home inspector will conduct an extensive investigation into the current condition of the home. Armed with this information, the home buyer can make an informed decision about a pending purchase.

Home Inspectors

There is a distinction between a home inspector and a home appraiser. Appraising a property involves determining the value of a property. Home inspections focus on the condition of a home's structure.

Home inspection is not a 'pass and fail' system. The process points out the present condition of the home. It falls to the home buyer to decide if they are willing to update the heating system or compile a list of requests for a home seller to complete before closing. Sometimes a second home inspection is required to see if the home meets the agreed upon condition before closing. Generally within the United States and Canada, home inspections are required before a home purchase contract is considered a valid agreement.

Licensed Home Inspectors

Home inspections can give peace of mind and a sense of security to home buyers. Overall, home inspection companies are run by qualified inspectors with a strong commitment to customer service. Yet there is one disturbing fact about U.S. home inspections. Not all states require home inspectors to hold a license.

More than 30 U.S. states, however, regulate home inspectors in some form or another. Meanwhile, home owners in the other states might get an experienced and conscientious home inspector or an inexperienced and unqualified individual. These home owners do not enjoy the benefits and security of having access to a regulated industry. Keep in mind that one's safety, security, comfort, and investment is riding on a home inspection. Home owners deserve the services of licensed home inspectors.

The way it was in home inspection

Divorce-Related Home Inspections

It is not only home buyers who need a home inspection. As well, home owners in the process of divorce need the services of a home inspector. Determining home value depends on the structural condition of the home. Many home inspectors list divorce-related inspections among their services.

Home Inspections during Divorces

Getting A Divorce? Are You Getting A Home Inspection?

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Usually, the most effective way to deal with a flaw is to fix it. Yet Ohio's Attorney General is suggesting that banks and lenders take a different approach – at least in one instance. In two letters, one to Wells Fargo and one to Ohio judges, Attorney General Richard Cordray states that he does not want banks and lenders to fix flawed foreclosures.

Flawed Foreclosures

The scandal and fiasco of flawed foreclosures erupted in recent weeks. It came to light that lending officials appeared to be guilty of "robo-signing" (signing without knowledge of details) foreclosure documents. Fifty US states asked for an investigation into the lenders' use of flawed documents.

The assumption was that banks and lenders would be required to fix the flaws. In fact, a few observers had considered the whole scenario to be a deliberate action to mislead home owners. Yet even though it may seem an odd request, Ohio's Attorney General doesn't want them to fix the 'flaw' (or the 'fraud' depending on your point of view).

No Temporary Fixes

Actually, the Attorney General should not be seen as condoning the lenders' actions with his request for no fixes. He believes that the lenders should not offer a 'temporary fix' to a serious issue in a flawed system. The Attorney General does not think that it is sufficient to have another look at the documents and fix any mistakes. He feels that the banks should vacate any court order or motion based on improper paperwork. He believes that lenders should modify loans and work out settlement with borrowers.

Of course, banks and lenders do not share Mr. Cordray's opinion. Indeed, some lenders say that they are finished reviewing documents and are resuming foreclosures. If Ohio's Attorney General makes headway with his demand, it would cause total upheaval to their plans.

Generally, lenders express confidence in their policies and controls. They appear comfortable with their approach to the issue. On October 20, 2010, Wells Fargo Chief Financial Officer Howard Atkins stated that he was confident with his company's policies and controls related to foreclosures. 

"The person at Wells who signs a foreclosure file is the same person as the person who reviews the file, and it is not always done that way in the industry," explains Wells Fargo Chief Financial Officer Howard Atkins.

Confusing Story

Yet the entire situation can be confusing because there can be discrepancies between lenders' words and their actions. For example, despite the insistence of Wells Fargo Chief Financial Officer about their perfect system, they announced on October 28, 2010, that they were resubmitting affidavits for 55,000 pending foreclosures.

It remains to be seen if other attorney generals feel the same way as Mr. Cordray. More than one attorney general, however, has referred to a 2008 settlement. At that time, the Bank of America agreed to an $8.4 billion loan-modification program following a probe of its Countrywide Financial unit. The issue revolved around predatory lending practices.

The probe into the foreclosure fiasco is still being played out at the moment. Of course, the issue of flawed foreclosures is no game or no slight error, and flawed foreclosures are having huge consequences for US home owners.

Big Banks Told Not To 'Fix' A Fraud

Do You Think That Lenders Should Offer Loan Modification?

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On this Halloween weekend, the more mysterious and creepy your entrance looks, the better kids (and adults) like it. Yet come Monday morning, lose the look! Indeed, if you are planning to sell your home, a mysterious, hidden, or overgrown entryway won't attract buyers. No dead branches or plants in the yard! Without a doubt, a horror of a door will spook your buyers.

Potential home buyers respond to well-tended property and a welcoming entrance. A neat and attractive entryway gives the impression that you care about this home. An inviting door and tidy yard can help to sell your home before the buyers even see the interior.

Added Attraction

Every house should welcome guests (and buyers) through an attractive and well-maintained front door. No scratches and scrapes or doors that won't open or close without considerable effort! The finish on doors can fade and chip after years of enduring weather conditions. Sometimes it is not necessary to buy a new door. A light sanding and a paint job might do the trick. Follow the manufacturer's instructions to choose the right type of paint.

Complementary Colors

The color of the door must work with the color scheme of your home's exterior. It doesn't have to be the same shade as the house. Yet the color should not provide so much contrast that it draws attention to the door alone instead of the entire home.

A bright color can work if your home is surrounded with brilliant flowers or blazing foliage. Generally, colors that blend with natural hues look welcoming at an entrance. Choose shades that match the natural elements (like stone or brick) of your home and its surroundings (landscape and other buildings).

Brilliant white is not an appealing choice for a front door because it is a stark color. Bright white is a cold tone - not a welcoming color. A white paint with a touch of yellow or pink is a better choice.

Your door should fit the look and style of your house. A small cottage should have a cozy look. A stately home should have a more formal entrance.

Surviving the Storm

Your door must look sturdy enough to survive a storm. You don't want potential home buyers to think that their entry door will blow down at the first gust of wind. If a home has a main door and storm door, both should look their best. If you can't afford to replace the main wood or metal door, buy an affordable and decorative storm door to make a great first impression.

Getting a Handle

When home owners put in the time and effort to make improvements to their entrance, they are 'getting a handle' on the sale. They are setting the stage for the sale of their home. Maybe that will mean having to buy new door handles.

Metal door handles can tarnish and chip over time. If yours look the worse for wear, replace them. Handles and locks are not difficult to install and it could be a DIY project. If there isn't already a deadbolt on the door, it may be a smart idea to install one. It will be safer for you while you're in the home as well as an extra safety feature that will impress buyers.

Decorative Touch

Even though the Halloween decorations are gone, potential home buyers won't mind a glorious fall arrangement or silk flower wreath on your door. It adds a decorative and welcoming touch. Inviting doors 'invite in' guests – and home buyers!

How to Improve the Front Entrance to Help Sell a Home

How to Choose a Front Door Color

Which Inviting Color Did You Choose For Your Front Door?

So, you don't believe in haunted houses? Well, they exist – everywhere! Houses that are 'haunted' by a horrific event in their past or a horrible rumour or even an association with horror!

Haunted Houses

In fact, maybe you are living in a 'haunted' house at this moment. The chilling reality is that you don't know for certain about every event in your home's history. Even if you have a new home, stories abound about deceased and disgruntled land owners that paid a ghostly visit to current owners of their previously-held property.

All in all, it adds up to a scary situation. Maybe you think this haunted house talk is just Irish malarkey. After all, Erin's Isle has more than its fair share of tales of haunted castles.

Creepy Irish Castles and Houses

Haunted Laws

If you think that haunted houses are a joke, think again! There are actual state laws about haunted homes. The housing regulations in various US states refer directly to the 'haunted' issue. Other states address 'stigmatized' property. These states point out that the 'haunted' reputation is decided on a case-by-case basis. The law's attention to haunted houses is not a figment of an overactive imagination. Haunted houses are 'real' – at least according to the state.

Since 1991, New York's housing law states that hauntings must be disclosed to potential home buyers. Now that official recognition lends more credibility to the 'haunted' factor. Law makers acknowledged that a 'haunting' past affects a home's value – usually in a negative manner. But not always!

Haunted Buyers

It depends on whether horror fascinates or horrifies you. For example, consider the summer sale of a 1909 farmhouse (home of three gruesome murders) in Fort Wayne, Indiana. As it turns out, the murders were the main attraction for one group of interested buyers. It is possible to sell a haunted house.

How to sell a haunted house

Haunted Deal

Yet not every home buyer feels so great about ghosts. Thus, the reason for the New York housing law about creepy homes. The 1991 ruling came into 'being' because of a few odd beings – poltergeists to be exact – who occupied a 5000 sq ft Victorian home in Nyack, New York.

A potential purchaser made a down payment without knowing about the poltergeists lurking in the dark corners. Home owner, Helen Ackley, had come clean about their existence. She had even written about her ghosts but she didn't note their tenancy on the sales contract. People, you have to include all poltergeists in the sales contact. Gee, that's a given!

But apparently, this home buyer didn't feel at all friendly towards ghosts. He demanded the return of his down payment. The present New York housing law about ghosts resulted from that court action. As an owner of a haunted house, you have to 'own' up to it.

Haunted Value

And who knows, your home's value could go through the roof. Having ghosts come out of your walls might sell your home. It depends on who's looking and 'whoever is lurking' might not turn out to be just a nuisance. Your live-in ghost might get you a great price for your haunted house. Happy Halloween!

4 Haunted Houses And What They're Worth

Do You Live In A Haunted House?

Selling a home is an emotional decision at the best of times. Of course, the obvious financial implications are added into the mix. Imagine if you're a senior who has lived in a home for 40 years or is facing a move to a seniors' home. The complexity of the situation goes up a hundred fold.

Major Decision

Factor in falling house prices and selling a home can be a huge dilemma for seniors. Yet they do not have to face this situation on their own. There is help out there for seniors who are contemplating this life-changing decision.

Getting Help

Firstly, seniors need to access trusted sources to help with selling property. Of course, the need for professional advice in this area is a 'given' and it applies to anyone in any age group who is planning to sell a home.

Real Estate Specialist

Seniors can take advantage of the expertise of various Seniors Real Estate Specialists (SRES) across the country. Everyone may not be aware that there are realtors who specialize in seniors' services. Actually, there are more than 7,000 agents in 50 US states who hold this designation.

Having this category in the industry makes perfect sense. When selling their homes, seniors have some of the same concerns as any other age group but they also have a separate set of issues. It pays for seniors to enlist the help of a Seniors Real Estate Specialist.

Falling House Prices

Today's seniors have to face the reality of falling house prices. They must confront a common issue - to sell now or wait and sell at a better time. With seniors, however, the issue becomes way more complicated because health issues or having a spouse pass away can increase the urgency of the situation.

Not All Gloom and Doom

Of course, there is always a bright spot in every market. Sometimes a senior who bought their house decades ago for a low price is surprised to see how it has risen in value over 40 years. The home's worth might have decreased in recent years but seniors are often shocked by the market evaluation. Even if seniors are pleased with the price, they still deserve to get the best advantage in today's market. An experienced realtor can guide them through the real estate process.

Their lifestyle will play a huge role in the final decision. Are they able to maintain this home in their present state of health? Are they living in a safe and comfortable environment for their age and condition? Is this the right neighborhood for them anymore? Maybe they no longer drive and need to be near public transportation. Is this the best area to live in at this stage of their lives?

Moving Forward

Seniors need the answers to a thousand and one questions. Industry experts can provide the answers. Health professionals can also advise them about the type of accommodations that would work best for them – whether a smaller home or a seniors' home. After all, selling a house is not just about leaving a home. Seniors also have to consider the cost and implications of moving to another home.

What seniors should know about selling a home

What Challenges Do You Perceive For Seniors Selling Their Homes?

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Ah, home sweet home! Make that home 'small' home for an increasing number of home builders and home buyers. House construction is seeing smaller and less expensive homes because builders are not getting the same price as before for expansive, upscale properties. A few builders claim that they are not making back the construction costs.

Shrinking Size

Some builders are getting rid of homes at a loss and concentrating instead on the business of renovation. Although in uncertain economic times, neither one is a safe bet. Everything has experienced a decrease in this economy (in certain areas more than others). Everything from house appraisals to new homes to house prices is seeing a decline – and now houses are also shrinking in size.

Part of the decision to go 'smaller' is fuelled by varied events that have undermined people's confidence in the market. Such issues as foreclosure rates, flawed foreclosures, lending issues, and more, are causing a build up of anxiety among potential home buyers. Of course, home builders share their anxiety.

"It's slowing the recovery of new construction. It's sapping confidence," says Robert Filka, CEO of the Michigan Association of Home Builders

In a certain Michigan suburb, a 3,600-square-foot home with 10' ceilings, is selling at a loss for the builder at $699,000. In 2008, that same home was priced at $875,000. Within the past decade, homes in that neighborhood had sold for $2,000,000. Times have changed and builders are changing with them.

No Luxury

With unpredictable appraisals that can come in even $80,000 less than expected, luxury homes can be a problem. Appraisers have to factor in recent sales in the neighborhood. At present, neighborhood sales can include anything from a short sale to a foreclosure.

As well, home buyers are often asked for higher down payments (even up to 25%). Luxury homes may start looking less and less appealing to home buyers. Builders who have noticed that trend are opting to construct smaller homes. Maybe a less expensive home will not seem as intimidating to the potential home buyer.

Hard times force home builders to think small

Downsizing

Some people are adamant about the benefit of small houses. Cost-effectiveness, smaller mortgages, and a simpler lifestyle are a few reasons that people give for choosing smaller and less expensive homes. Even environmental reasons play into the desire for smaller homes. They use fewer resources in building and for maintenance.

Of course, buying a 'too small' home is not a wise move. A home can be as small as anything - as long as it suits your needs. If a home does not have sufficient space, it will not work for a growing family.

Perfect Fit

Yet if the size suits you, a small home might be the right choice. People have found 'small home' ownership to be an exhilarating experience. It frees up savings for travel and it frees up the precious commodity of time.

'Small home' ownership means less time spent cleaning and fewer hours required for maintenance. Smaller homes allow you to have more quality time with family and friends. Maybe though not everyone will want to go as 'small' as this home builder.

Take a look at - World's Smallest House!

Have You Been Dreaming of Building a Small House?

Would A Small Home Suit Your Needs?