The result of the millions of foreclosures over the past few years is an enormous back log of empty homes sitting in neighborhoods across the nation.  This gigantic foreclosure inventory has changed the face of home buying for years to come.  Combine the massive foreclosure and REO inventory with the lowered interest rates and buyers today can find affordable properties that outshine many traditional homes being marketed.

If you don’t understand the dynamics of this buyer’s market or what exactly is going on, it goes like this.  There were mountains of foreclosures going on creating a number of empty foreclosed houses in every neighborhood, in every town, in every state of our great country.  Foreclosures lose their value quickly as a house that is sitting empty and is not being properly maintained can’t possibly take care of itself.  As more foreclosures infiltrate neighborhoods, they decrease the value of other properties in the neighborhood on the way.  In addition to this natural decline, there is the marketing value of a property that also diminishes.  This means that if a house just like yours is a foreclosure down the street and is priced even as little as $5000 less than your own, it is going to sell before yours or force you to knock down the price of your property accordingly.  Can you see where this is going? As the overall value of properties in your neighborhood and town decline, so does yours.  The other end of that spectrum is that if you are looking to purchase a home, there is no better time than right now to get a great deal on a foreclosure.

There is much talk among real estate gurus that 2011 will see recovery in home prices and this is already true for some areas that weren’t as badly shaken by the foreclosure wave.  There are still other states however, like Florida and Arizona who won’t likely see an upward real estate trend until into 2012.  If you are looking for vacation property in Florida, now is the big time to buy.  You can find homes, condos and more at amazing prices.  If you are looking to relocate, this is an equally good time to buy a property that will appreciate during your time in a new state.

Most importantly is the rehabbing potential of the foreclosure market right now.  There hasn’t been a better market for investors in years; however only investors who are willing to hold onto a property for at least 5 years are going to be seeing the great returns.  For landlords, rental property management companies and private investors who are interested in rehabbing and renting or rehabbing and offering lease to own options, today’s foreclosures are dreams come true.

There are many advantages to be had when diving into today’s buyer’s market and purchasing foreclosed properties or their safer side kick, REO properties.  Always work with an experienced agent, make sure you evaluate the property’s repair and maintenance needs realistically and you are sure to see a return on your investment in the long run.