Friends of mine are shopping for a home in the pricey Princeton, N.J. area. Their price range is an entry-level one for that market, so they have been having some difficulty finding a home that suits their needs at a price they can afford. They finally found one they liked, put in a bid, and to their surprise (especially in today's economy), were beaten out by another buyer who offered cash for the house.
Perhaps their experience is a hint of an improvement that's to come in today's housing market -- at least with housing at the lower end of the pricing spectrum, homes that tend to attract first-time homebuyers. With the $8,000 federal tax credit and low mortgage rates now available to new buyers, industry experts expect more first-timers to take the plunge.
With deeply discounted prices and so many foreclosures on the market, today's market is a good one for newbie buyers looking for a bargain -- about half of all home sales now are of distressed homes -- with 15 percent to 20 percent being short sales (when a homeowner must sell a home for less than what is owned on its mortgage) and 30 to 35 percent being foreclosures, according to real estate trade group, the National Association of Realtors.
For a primer on short sales and foreclosures, check out Sarah Max's story, Buying Foreclosures: Deal or No Deal, on Cyberhomes.com.—Lauren Baier Kim