Signs That Indicate When It Might Be Time to Swoop Down & Buy Foreclosures

The surge in home mortgage foreclosures has added to the huge inventory of homes for sale and potential homebuyers are waiting for home prices to bottom out before buying. As banks attempt to unload their foreclosed properties and homeowners in danger of a home foreclosure seek to find relief from their mortgages, the pressure is on to lower home prices. However, when do you know when homes have bottomed out and it’s the right time to buy? By checking the following you can gain insight into a home market turnaround.

• Mortgage defaults--when the number of foreclosures is rising you can be sure that home prices are falling. You can find information regarding REO (the real estate term for foreclosed properties) through the county recorder's office in your area.
• Home foreclosure sales--this is the actual number of foreclosure filings which can also be determined by going to the country recorder's office or you may find help from a title company. Home foreclosures are generally listed between 10-20% below the current market.
• Builder's permits--builders know how to read their local market and if you begin to see a consistent rise in builder's permits you are seeing a change in the housing market pulse.
• Existing home sales--you want to look for an increase in the moving average during the last 12 months in your area to see whether the market is beginning to shift more toward a seller's market