New, Existing and Repo Homes Prices to Hit Bottom

Posted on April 6th, 2009 in Foreclosure Prevention

Prices for new, existing and repo homes are expected to decline another 10 percent over the 27 percent drop experienced by the housing market since it peaked in 2006.

Market forecasters made the nationwide projection that prices for new, existing and repo homes will reach its low point by the end of 2009 on the assumption that President Barack Obama?s various housing recovery programs will show some progress this year. Some of these housing recovery programs are foreclosure prevention, bank lending and tax credit for homebuyers.

However, Mark Zandi of Moody?s Economy.com said that if Obama?s recovery program would not have some effect soon, prices for new, existing and repo homes will reach its low point at the latter part of 2011.

Meanwhile, Weiss Research real estate analyst Mike Larson said that after prices of new, existing and repo homes reached their low point, they will most likely remain at the bottom as the country?s economy struggles to get back on its feet.

He added that it will take another decade for prices of new, existing and repo homes to gain back their 2006 level.

Industry experts offer this purchasing, investing and selling tips to current homebuyers:

  • Get a sense of home price trends in the area where you plan to buy a property.
  • Do not buy a house in an area where prices of properties are expected to drop for more years.
  • When buying, negotiate a home deal that will factor in the expected price drop of the current year.
  • Repo homes are still the best buy. According to RealtyTrac, foreclosure homes sell 20 percent or 30 percent less than their market value.
  • When buying foreclosure properties, hire a home inspector to determine the things that need to be repaired and the cost involved.
  • Find short sale deals. Short sales are transactions in which banks allow owners of distressed homes to sell their properties for less than what they owe. The deal could give homebuyers savings of as much as 10 percent.
  • To get a good mortgage rate, homebuyers should have no less than 720 credit score and make a 20 percent down payment.
  • Buy a property in an area where unemployment is manageable and the economy is strong.
  • Lastly, before you scout the neighborhood for a possible buy, get a pre-approved loan first to ensure that you will qualify.

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