Have we hit rock bottom in the real estate market?!

Have we hit rock bottom in our real estate market? If you could see what I see right now, you might think so. Right now there is a severe shortage of homes under $300,000. The bank owned properties in that price range have all but dried up. 'Normal' sellers are few and far between. What's left are Short Sale's (properties that are being sold by the home owner for less than what they owe on their mortgage). And it's the Short Sales that are getting all of the offers now. Buyers are getting desparate!

What's typical these days is for Banks (via the Listing Agent) are listing properties for FAR lower than the 'comps' in the area. Obviously buyers will come out of the woodwork to submit offers on really good 'deals', with most of the offers coming in WAY above the asking price. So the great deal you might have seen for $225,000 just probably sold for $265,000 or more. Had it been originally listed for $265,000, it might not have looked like such a great deal. But buyers are emotional, and they tend to react differently when there's competition. And it's HIGHLY competitive out there right now.

So, with a limited inventory and numerous buyers, prices are bound to go back up. Even if it looks like prices are still dropping because banks are listing them so low, chances are the SOLD price is much higher, bringing in a higher 'Comp' for the next listing or appraisal.

With interest rates at all time lows, and prices dropping more than they have in decades, is now the time to set your sites on your next investment?

Maybe so!

Snag a great deal on a short sale

Short sales - where a lender agrees to take less than it's owed on a mortgage - are rising sharply. Here's how you can profit.

(Money Magazine) -- When Brian Gavitt, a physician, and his wife Gayleen, a stay-at-home mom, started to eye homes in Sacramento last winter, they knew they were looking in the hardest-hit areas of the housing bust. So the couple, who were relocating from Lansing, figured they could land a fantastic bargain in no time at all.
The part about the bargain turned out to be true. The Gavitts bought a five-bedroom house in the upscale Natomas Park neighborhood ("Even now, you don't see FOR SALE signs up anywhere," says Gayleen.) And it was a steal at $300,000, a full $200,000 less than they would have paid just two years ago.
The amount of time it took to land the deal was another story. It was more than six months from when the Gavitts first saw their dream home to the moment they held the keys in their hands. The reason: The home they bought was a short sale.
Not along ago, few people had even heard of a short sale, which occurs when the bank agrees to discount the loan balance for a seller who owes more on his mortgage than the home is currently worth.
If you're in the market for a home today, you're almost guaranteed to be looking at some short sales. Nationwide, 14% of homeowners are currently underwater on their mortgages, calculates real estate website Zillow.com. And in many areas, it's far more: In the Gavitts' zip code, for example, over half of homeowners would owe more than their home is worth if they sold today, calculates Dee Schwindt, the Gavitts' realtor.
The good news is that short sellers are likely to still be living in the home and some may even be current on their payments. That means these aren't the run-down, distressed properties that you often find among foreclosures; in fact, there's a good chance that some of the most deluxe homes for sale in your market are underwater.

http://money.cnn.com/2009/01/27/real_estate/short_sale.moneymag/index.htm