Another Drop In Value Headed For Property?

After the free fall in real estate prices in 2008, many people thought the worst was behind us, but the projections indicate that we are headed for another steep decline in prices over the next 12 months, after the brief gains fueled by the tax credits.

A trio of gathering government storm clouds will be responsible for the drop that some predict could mean another 10% to 15% slump in prices, they say.

After a 36 month departure from the peak of the real estate market, the topic of the day is still real estate and the current trend in prices. Despite the bad news, real estate appreciation was actually reported across the nation in 2009, but it is doubtful for 2010.

Increasing its loan standards may seem counter intuitive to anyone who is familiar with the function of the FHA, and the changes it is proposing will make getting a home loan a little harder.

Due to the inundation of foreclosures, the FHA reduced the number of qualified buys by forcing those with the weakest credit to pay higher payments for mortgage insurance, increasing the required down payment and limiting seller contributed closing costs.

With fewer people having high enough credit for standard loan programs, more people have turned to using FHA backed financing to get their loans done.

With unemployment swamping the real estate market with foreclosures, many buyers have an easier time getting qualified with FHA loans, so they are increasing in popularity. Being forced to utilize FHA type loans, many buyers are finding a great resource in them in a time when conventional loan money is more than difficult to get.

As with any other time in our national real estate market, financing is still the bottle neck in the process. The ultimate solution is really to have more Americans do things the old fashioned way and save their money for a large down payment.

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