A few interesting observations appeared on the National Association of REALTORS® website regarding the distressed real estate market. In their commentary, they divide property sales into two categories:

• Distressed – discounted properties in need of repair or facing foreclosure/short sales.
• Non-Distressed – market value properties.

Estimating that the market for distressed sales ranges between 35-50% of existing home sales recently, they cite buyer confusion over the expectation of low prices. NAR members point out that buyers think:

• They can get deep discounts on the listing price.
• All sellers are in financial trouble.

Offering further explanation of this phenomenon, the commentary concludes that this gap between buyer and seller perceptions of the market is temporary and is already healing.

Get the full story at the National Association of REALTORS® website.

Today eppraisal.com released its National Real Estate Market Analysis report for 179 markets across the continental U.S. This report, which tracks median sales price of residential homes, compares data on homes sold in the fourth quarter of 2008 with homes sold in the first quarter of 2009.

143 markets across the U.S. saw decreases in the median home value from the 4th quarter of 2008 to 1st quarter of 2009. This represents 80 percent of the markets tracked by eppraisal.com. Although this is still a high percentage, this number has remained fairly consistent from the prior report (covering the six months ending February 2009). Smaller markets continue to dominate the positive side of the report with most of the top markets on the list having a population of 400k or less. A few of the smaller markets that saw increases were Missoula, Mont., which is up 9.6 percent to a median value of $228,750; Midland Tex., up 1.8 percent to $166,000, and Fayetteville, N.C., up 6.2 percent to a median value of $138,000.

Of the 179 markets tracked, only two markets – San Francisco-San Mateo, Calif., and Honolulu, HI – had a median home value more than $500,000. Honolulu’s median in the first quarter was $567,000, which is down 2.7 percent from the 4th quarter of 2008. The San Francisco area is down 13.2 percent to a median home value of $590,000. In the $400,000 to $500,000 group, only Santa Cruz, Calif., Santa Ana-Anaheim, Calif., and San Jose-Sunnyvale, Calif., exists with a median value of $435,000 (down 3.1 percent), $437,000 (down 3.6 percent), and $426,500 (down 12.1 percent) respectively. Though most of the markets are seeing continued declines, 8 percent of the markets tracked by eppraisal.com had a median value between $300k and $400k, and 90 percent had a median value of less than 300k.

In the major markets, declines continue. For example in California, San Diego-Carlsbad saw a 3.8 percent decrease to a median home value of $330,000, and Los Angeles dropped 10.3 percent to a median value of $305,000. In Florida, Jacksonville decreased by 1.2 percent to a median value of $169,000, and the Orlando-Kissimmee area declined 5.4 percent to a median home value of $175,000.

See a complete listing of real estate market rankings from eppraisal.com.

As the national housing market continues to crunch, first time home buyers have a unique opportunity to capitalize on the American Dream of owning a home at a rock-bottom price. While this is an unfortunate situation for the homeowner in distress, first-time home buyers have a solid chance at buying desirable homes for massively reduced prices.

There are actually a few different ways for home buyers to take advantage of the record amount of foreclosures deals available on the market right now. Let’s review each scenario individually.

Preforeclosure
Homes in preforeclosure have not been foreclosed on. This type of home or property has a Notice of Default (NOD) (also referred to as Lis Pendens) filed against it. The NOD is filed by the lender anywhere between three to six months of non-payment on the loan. NODs are filed with the County Recorder’s Office.

Homeowners in preforeclosure typically are trying to sell before the home is foreclosed on and sent to auction. In certain situations, a first-time home buyer can pick up a nice home for an incredible value by buying the home for the amount remaining on the home loan.

For example, if a borrower had a piece of property in preforeclosure with a market value of $150,000, but only owes $100,000 on the loan, the real estate buyer could pay the $100,000 for the home and come out ahead.

Foreclosure
After the NOD has been filed against a home, an additional three months usually passes before for the home is scheduled for public auction. At this point, the borrower has just several days before the foreclosure auction to correct the situation or sell the property. After that, the home is considered in foreclosure and sold at auction.

This again presents an opportunity for first-time home buyers. When the property is processed through a foreclosure auction, anyone can attend and bid at the event. Buying a home at auction is considered a bit risky in comparison to other methods of purchasing a foreclosed home. However, if the bidder does his or her homework, it can be done.

Some things to keep in mind when purchasing at an auction are as follows:

Don’t go into the situation blind. Research the home to determine if there are any unpaid taxes, construction debts or liens. This can be done by ordering a title search on the land prior to the day of the auction.

• Review how the auction process works and what rules you must follow.
• Visit the area before the auction and look for any existing problems such as toxic waste issues or zoning challenges.
• Attend a handful of foreclosure auctions to see how they work.
• Determine a maximum bid and stick to it.
• Make arrangements for financing before the auction. Winning bids are typically due just days after the auction ends.

Purchase After Foreclosure
When a home is not sold to an outside party at the foreclosure auction, it ends up in the bank’s hands. Banks are not in business to be homeowners.  So as one can imagine, a foreclosed home is a lot like a hot potato.

Typically, the bank will pay for miscellaneous debts associated with the home, including IRS taxes, property taxes and so on. Banks also have the ability to negotiate price of the property, down payment, and closing costs with the first-time home buyer. Because it is ideal to sell the home, the buyer has a better chance at snapping up a dream home for an ideal price.

Purchase a HUD Home
When a federal Housing and Urban Development (HUD) or Federal Housing Administration (FHA) mortgage forecloses, the home is sold through a HUD program. HUD homes are pre-approved for an FHA mortgage, which means they are appraised and ready for sale.

Additionally, HUD homes can be purchased for less than market value, saving the first-time home buyer money. The downfall to HUD homes is they are sold on an “as is” basis. Real estate shoppers must also navigate the HUD program with the assistance of a HUD agent or broker who can submit an offer on behalf of the buyer.

Whether it is shopping preforeclosures or bidding on a HUD home, there are several ways for first-time buyers to realize the dream of owning a home without breaking the bank.

To find a home at an affordable price, search for foreclosure listings in your area.

ORLANDO, Fla., March 5, 2009 —Today eppraisal.com released its National Real Estate Market Analysis report for 182 markets across the continental U.S. This report, which tracks median sales price of residential homes, compares data on homes sold in August 2008 through October 2008 with homes sold in November 2008 through January 2009.

There are no surprises in the data with 89 percent of the markets tracked by eppraisal.com seeing a drop in the median sales price of homes sold between November ‘08 and January ‘09. The hardest hit areas were in Ohio, Michigan, and South Carolina where some cities saw more than a 20 percent drop in the median sales price. In Akron, Ohio, Toledo, Ohio, Sandusky, Ohio, and Dayton, Ohio, home prices were down 37 percent, 26 percent, 24.4 percent, and 23.6 percent respectively. In Michigan the Warren-Troy-Farmington Hills area saw a 29.4 percent decline to a median home price of $60,000. In South Carolina, Florence saw a 22.6 percent drop in the median sales price to $82,036. Sumter declined by 21.2 percent to $85,000.

A few smaller markets in North Carolina, Pennsylvania, and Georgia saw increases in median sales price. For example, the Burlington, N.C., market saw the greatest increase of all the markets with a 13 percent increase in the median sales price to $130,000. Another double digit increase in the median sales price occurred in State College, Penn., which saw a 12.5 percent increase to $180,000. Outside of those two markets there were no other double digit increases in median sales price; however, Rome, Ga., and Gainesville, Ga., came close with increases of 9.7 percent to $214,000 and 9.3 percent to $107,100.

See a complete list all areas tracked by eppraisal.com.

Freddie Mac launched an initiative to allow qualified tenants and former owners to rent bank-owned properties after foreclosure.  They will continue to suspend evictions until April 1, 2009 to ensure there is ample time for current occupants to learn about the options available to them under the new initiative.

To qualify for a lease, the tenant or former owner must occupy the property and show they have adequate income to pay the monthly rental amount established by the property management company based on market rents for the area in which the home is located. Occupants must agree to allow the home to be shown to potential buyers as it will be marketed for sale during the lease period.

Additionally the home must be in safe, habitable condition and meet all local codes for rental properties to qualify.