Nationally the number of unsold homes sitting on the market has jumped almost 50 percent on the past year. There are a few places such as Salt Lake City and Atlantic City are still doing well, but housing prices have had the biggest year-over-year drop on record. Some areas are reporting that single family homes is down 3 percent while condo sales are down 11 percent.
What has happened is some builders have gotten into the mortgage business and lowered the lending standards so that people can qualify for homes that may be out of their price range. The problem with that is homeowners can't sell for what they owe on a loan and they can't afford a refinance. I have read that up to five million people across the country are in this tough situation and could face foreclosure.
This is even effecting lenders as some lenders are closing up shop because they had so many "non-performing" known as "Ninja Loans" from people who can not pay their mortgage due to the increase of the variable rate or a balloon payment now due.
For most home owners the real discomfort comes from Property taxes that are rising all around the country. On an average, property taxes are up 13 percent even after accounting for inflation, according to The Wall Street Journal.
So what does it all mean? Great opportunity is coming for home buyers. Home builders are cutting costs because they aren't getting as many customers.
Recent issues with "non-performing" mortgage will hold back sales temporarily, but price trends in many local markets will stabilize. The feds have also stepped in to propose a new set of guidelines for sub prime lenders.
So if you are a buyer hold on for a few months and dig deep when looking and owners spend some time remodeling and really work towards making your home unique. If you can strip floors, redo the kitchen or bath or upgrade and rewire the electrical outlets, your ROI will benefit from it. If you have a more high end home consider adding in a whole house automation system. Yes that may be a little James Bond for you but the current trend with VOIP phones, Internet access and personal video recorders a automation system will only add to your homes perceived value.
One last word if you currently a victim of "non-performing" mortgage or variable rate loans that have gone trough the roof, here is some advice from Donald Trump, chairman and president of The Trump Organization
"Don't leave! The last thing the bank wants is that house -- it'll be five years before they can sell it. Go back to the bank and re-negotiate your deal. Fight like hell, because you might make a better deal than you had in the first place."
