A Booming Real Estate Market

However, hope might be on the horizon for the victims of the mortgage disaster of 2007/2008. Home buyers who were foreclosed upon years ago, or boomerang buyers, are beginning to be eligible to buy homes again. While some feel hope after feeling bamboozled by lenders and Fannie Mae and Freddie Mac, some feel anxious and fearful of the thought of buying again. Yet there are lessons that have been learned by the mortgage meltdown. Fannie Mae and Freddie Mac provided a lesson for the

perfect borrowers, while the borrows no longer trust lenders to give them a home ownership deal

Why would these Boomerang Buyers want to jump back into homeownership and at what cost would they “buy” another home? It’s understood that the American Dream of homeownership runs deep in the American belief system. Even people who have experienced foreclosure in the past, still dream of owning another home of their own even BEFORE they move from the foreclosed home. Why is this so important to Americans? The answer is partly based on marketing and myths that have been around for many years. The ability for one to create a pathway back to homeownership is varied and like many things, has potholes along the road. From predatory lenders to landlords who participate in rent to own or owner financing

Where there is darkness there is ultimately light and the various homeownership opportunities under the current economy reflect this notion. Real estate prices

Homeownership is now competitive in the market with most people willing to bid $10,000 over the asking price. Even with some strong points in the housing market people think that the increasing homeownership is not a worthwhile policy goal for America.

However, there is an upside. Most of us would think that the U.S. housing market is devoid of positive trends, which according to the National Association of Realtors, is not the case.

First, the housing market is starting to come back to business, but it is taking some time.

House flipping is a term used to describe purchasing a revenue-generating asset, specifically real estate properties, and quickly 'flipping' (selling) it for profit. It is a practice of buying real estate, making improvements and reselling it for a higher price.

There are some programs to help such as the Federal Housing Administration that gives people a second chance with a foreclosure or short sale of a home. Low interest rates and low down payments, it gives people another chance to become a homeowner again. The potential buyer still needs to cleanup their credit to make themselves worthy of another chance. Many of the former owners are renting, but still have desires and hopes of getting back into a home soon. This helps the housing market from the boomerang buyers, because they are moving out of rental units and back into homes.

Interestingly, if you compare the number of prices reduces in February 2011 (80), to the number of current price reductions (0), it is evident that Apex is currently experiencing a seller’s market. Although homes remain on the market about a month longer, homeowners are not reducing their prices; therefore, higher-priced homes continue to sell in Apex.

The house market has started to rise again, and for so saying that, many boomerang buyers are heading back to the housing market. People who go through foreclosure can rebuild credit records and qualify for home loans again in three to seven years if they manage their finances well. With many home prices still at low prices and interest rates near record lows, today’s boomerang buyers might even find their next mortgage more affordable than the one before. Most of boomerang buyers are around areas such as California and Arizona where the house market took the hardest hit by foreclosures, and their return is contributing to rebounds in those markets. Going forward, many growing numbers of boomerang buyers could help the offset the expected slackening in demand from investors as home prices start to rise, says Stan Humphries, economist for real estate website Zillow.

What have you always been told whenever you get into some money or a new job? “Housing is always the best investment.” If you have been told this, you have been told a lie. (TruTV) Housing was thought to have been a rock solid industry for decades, but that all changed in 2007. As showed by Paramount Pictures movie “The Big Short” shows very entertainingly how banks and regulation have made America 's housing market into a system of fraud and theft by big banks. “But that 's in the past” some may say, but as former housing market crash investor and former owner of Multimillion dollar investing firm Michael J. Burry stated, “Today 's economy is showing telltale signs of repeating the mistakes made in the 2007 crash.” (Michael Burry Blog) An analysis of the housing market of today will reveal many signs of an inevitable crash such as: the minimum wage fallacy, The prices of housing rising, the government supporting bad loans, and why the government cannot stop it.

The new construction market in the mid 2000’s was flourishing. People saw building a home as an opportunity for a solid investment because prices and rates were so low that certain homes could depreciate extremely slowly. However, there would be a negative effect from all this low-cost new construction and few were aware of just how devastating it would be to the new construction market.

For the past several years, the housing market has been mutually beneficial for both buyer and seller. The cost of real estate has risen but has maintained or gained value. People who have owned their home for quite awhile are seeing astronomical amounts of money to be made off the sale of their home, and so the market has been inundated with housing for sale. It leads us to wonder whether this boom is heading for the crash. Is now still a good time to buy? If so, what type of property will continue to gain value? Will new buyers end up stuck in their home as the value drops? As a homeowner, I am nervous about the state of the real estate market. This is not the house my family wants to call its home forever, but could we get stuck here? Yes, we could. If the housing market drops, then so will the amount of money we could potentially make off the sale of this house. If it drops enough then it would be possible to end up owing money upon the sale. Unless you are independently wealthy, you hope to make money off the sale of the home to help finance the purchase of the next home. Real estate agents will tell you that now is still a good time to buy. While it is speculated that the market will drop within the next year or two, if you are willing to sit on your new purchase for several years, an upswing will occur again. There is never any guarantee that you will recoup the money paid for and put into a home. If you intend to purchase a home soon, it would be a good idea to

Around 2006 the price of houses began to fall substantially fast. “The oversupply of houses and lack of buyers pushed the house prices down until they really plunged in the late 2006 and early 2007” (The Subprime Mortgage Crisis Explained). These actions threw investors into a big dilemma. In the beginning they believed buying the mortgages would bring them a profit, but quickly realized that the mortgages would cost them more financial damage than reselling the homes. “Nationwide, home vales have declined about 16% since the summer of 2006 and experts project that the drop will continue until homes have lost about 25% of their value” (Biroonak, 2008). In other words mortgage homes are “underwater”, that is, the mortgage owed equals or exceeds the value of the house (Biroonak, 2008). Investors and homeowners started to go more in debt trying to pay off their original debts.