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While there might still be a few advisors on television telling everyone that the housing market is doing splendidly, it seems that everyone has finally begun admitting that there is truly a crisis brewing. House market predictions made in the last year have generally been kinder than reality, and many places are seeing significant declines in property values. It is a global problem as well, not just here in the U.S. (more…)

The current fluctuations in the market make specific predictions difficult but with economic difficulties expected to extend throughout 2009 and recovery not expected until 2010, housing prices are expected to continue a downward decline throughout 2009. This is generally viewed, understandably, as a negative trend by homeowners as it impacts their ability to borrow against the value of their home. The nature of free market economics, however, define the current situation as a buyers market, which means that the advantage has passed from the owner to the buyer. Of course, the simultaneous credit crunch that has affected the nation has made purchasing homes more difficult than it was during the real estate bubble that has defined the last several years. (more…)

There are a few reasons why some parts of the United States are simply a safer investment than others, where the market is nearly always robust enough to survive the economic ups and downs that destroy other real estate markets. A diverse mix of income sources and companies to provide steady employment, zoning and urban plans that don’t allow for wild building frenzies and a tendency not to attract sudden influxes of people moving in are just some of the factors, and Forbes has used all these criteria and more to create a list of five US real estate markets that they think have longevity. If your real estate investment is in any of these five cities, you can consider yourself pretty fortunate (or smart!):

• Seattle, Washington: because there’s still been good job growth and no out-of-control building
• Washington, D.C.: in part, because it has the lowest unemployment rate in the whole country
• San Antonio, Texas: with good job growth and not too much building
• Minneapolis, Min: because it didn’t go crazy with a boom and has a strong base of manufacturing and multinationals
• New York, N.Y.: because there was no crazy building boom - there’s nowhere left to build - and it has the lowest accommodation vacancy rate of all cities

You might think that all real estate prices have done lately is fall, and fall some more. But the end of year statistics say otherwise: in every corner of the United States there are areas where real estate values fell but also some where the values stayed the same or even rose.

Here are a few examples that might get you thinking about where you might want - or not want - to invest in real estate in the coming year:

• California: The vineyard city of Soledad soared during the boom and came down with a thumping crash, with real estate values falling nearly 40% there during 2008. On the other hand, technology-loving Palo Alto saw homes increase in value about 4% - not bad at all.
• Georgia: Gainesville didn’t have gains at all in 2008: this northeast Georgian city saw real estate prices slump by over 20%. But in the same state, a suburb of Augusta called Martinez had prices rise over 4%.
• Alabama: Things weren’t too bad anywhere in Alabama, with the worst real estate record of 2008 going to Alabaster - but this fall in value was just over 2%. In Montgomery, home values rose more than 5% for the year.
• Arkansas: On the other hand, everybody lost out in Arizona during 2008. In Springdale, homeowners saw the value of their properties fall on average more than 27%, and the best performance was in Sierra Vista where prices still fell, but by just over 4%.

Now might be a terrible time to sell your home, but what many people haven’t yet thought of is that it’s actually a great time to renovate your home.

For a start, the costs of many materials needed in renovation jobs has fallen. This is particularly true for exterior projects like replacing your roof or repaving the driveway.

On top of that, the fees being charged by contractors are falling as they fight for the fewer jobs available. Apparently most will discount their fees by at least ten per cent just for the asking, and many by more.

And while the experts are saying that it will now take a little longer before you can recoup the entire value of your renovation in selling your home, as long as you’re not planning on selling immediately you’ll still be winning by enjoying the many benefits of renovations. A smart one at the moment is replacing windows, a project which is high on the list of improvements whose value is quickly recouped and at the same time, will save you money on heating and cooling costs.

Other home renovation projects that the experts recommend right now include remodeling your bathroom and either a minor or major kitchen remodel. Replacing your siding is also a cost-effective move to make at the moment.

While most of us are dreaming of extending our family house somehow - more bedrooms or an extra bathroom, usually - there are also a lot of advantages to be had from shrinking your home: that is, selling a larger house and buying something smaller. (more…)

There’s not really too much good news out there about what house prices will do in 2009. Experts are predicting that the global economic crisis - which they’re saying is likely to include a recession for at least three quarters of the year - will further damage the real estate market and in some places, drive prices down even further.

Over the last two years, the average house price in the United States has already fallen by 20%. Some experts think that 2009 will see another drop of 20%; others say it’s likely to be “only” 15%; but one thing’s for sure, nobody’s predicting a big rise in house prices. Of course, it also depends on where you are. The scariest predictions for value falls during 2009 are places like Miami (could fall by 19%), Los Angeles and Washington (experts say the drop could be 17%), and New York and Boston (also double digit falls - around 14% and 12.5% respectively).

But there’s good news. Nearly everyone’s predicting a turn around in the market towards the end of 2009 and on into 2010, so unless you’re in a position where you have to sell your house in the next year, just sit tight. Values should start to rise again and that neverending economic cycle should kick most people back into a more promising financial position. Fingers crossed.

Slumping property prices are not a problem exclusive to the United States at the moment, because over in Britain the Times is offering tips on selling your house in a downturn. Some of the most useful include the following:

• Select the real estate agent carefully, and ask at least three for their ideas on a selling strategy. Make sure they have detailed local knowledge of the real estate market.
• Know your local market well - they give the example of knowing what kind of prospective buyers there will be and deciding whether a third bedroom might be better displayed as a study than a bedroom.
• Be realistic about the price you can achieve in the current market; apparently setting a higher price and then reducing it drastically later is a bad strategy that makes the house look less valuable than it is.
• Make the house look most marketable by cleaning it well and giving it fresh paint wherever it’s needed - the cost of this (especially if you do it yourself) can be relatively low but can increase the value a lot.
• If you’re selling the house because you need more space, carefully consider whether you could extend your existing house instead.
• Be flexible about a purchaser’s requests - for example, if they want to move in especially quickly, it might be worthwhile for you to move out to rental accommodation while you find your next home.

Renting an apartment or house usually doesn’t seem like a situation where you can do a whole lot of negotiating, but if you do your research you might be surprised by how many ways you can get a better deal as a tenant.

Doing your research well and planning ahead are two important factors in making sure you get a good deal on your rent - if you have to take something urgently or at the last minute then you’re much more likely to end up having more rent to pay, just because you can’t afford to be choosy. Know how much is a fair rent in the area you want to live in and give yourself plenty of time to find the right place at the right price.

It’s also important to consider the marketing side of being a tenant. That means that you have to promote yourself to potential landlords as a good tenant, as well as trying to negotiate the best deal by pointing out advantages for the landlord of what you propose. For example, if you want to sign a longer rental contract, try and persuade them that if you have a two-year contract at a slightly lower rent they’ll still end up on top compared to changing tenants after a year.

One last tip is to see if you can do some work in exchange for part of the rent. For example, offer to do some maintenance or minor home renovation works in exchange for a discount in rent and you might be surprised at how many landlords will take you up on the offer.

photo credit: faeryboots

Amongst all the bad news, it’s good to know that there are still areas around the United States where house prices haven’t taken such a beating. A Smart Money survey recently summarized seven cities where the real estate market is looking reasonably healthy:

1. Seattle - helped by its low unemployment, partly due to having strong employers like Boeing, Amazon and Microsoft located in the area.
2. Des Moines - suffered through a real estate bubble in the 80s, and diversified its economy which stood it in good stead for this crisis.
3. Raleigh - had job growth during the slump thanks to a lot of high tech companies moving into its Research Triangle.
4. Salt Lake City - The Church of Jesus Christ of Latter-Day Saints helps out here by providing a lot of steady employment; but in general it’s a diverse, “pro-business” city.
5. Philadelphia - house prices here didn’t soar high but had just a steady growth, so now they haven’t fallen far.
6. Birmingham - plenty of strong employers here (including Mercedes and Honda plants, and a large university) have kept the economy here relatively stable and house prices have followed.
7. Denver - like Des Moines, already suffered a bust so the economy wasn’t ready to go wild; that’s kept things relatively stable and the housing market is already acting at a level many experts consider normal.