In the six months that my house has been on the real estate market, I received only two offers recently and both started at quite a bit lower than my asking price. I finally accepted one offer at a price that I felt was much less than my house is worth. Part of my reason for doing so was because so few other homes in my neighborhood had sold in the last 12 months that it was very difficult to find comparable homes for purposes of appraisals and lending underwriting.  In neighborhoods with lots of foreclosures, that is certainly causing downward pressure on prices as well.


As I look at potential condos and co-ops to buy, it is similarly difficult to estimate what the fair market value of a unit is when so few nearby condos and co-ops have sold recently. I have noticed, however, that many more units are on the market this year than last year and that most units are listed for a lot less than they were listed for just five years ago.


As I researched market rates for mortgage loans, I noticed that interest rates remain quite low, especially if the buyer has excellent credit and can put down a substantial down payment. Limited assets for down payments and persistent low credit scores, particularly in low-wealth communities and communities of color, make it difficult for many borrowers to take advantage of favorable market conditions, however. Certainly, more prospective buyers could take advantage of these low property prices and mortgage rates if they received appropriate pre-purchase and credit counseling and if they were more confident that home prices will stabilize and that the continuing foreclosure crisis will not erode the value of their homes.


In order to stabilize our neighborhoods through owner-occupied homes and help our economy rebound, we must increase public, private, and philanthropic funding for pre- and post-purchase housing and credit counseling. We must also continue to demand public and private loan modifications with principal reduction to stabilize neighborhoods with underwater mortgages and to encourage qualified renters who are ready to become home owners to get into this buyer’s market. For areas already littered with vacant and distressed properties, if we want to attract responsible buyers and renters, we must hold servicers accountable for property upkeep and devise new strategies, such as land banks, to deal with these distressed properties while community stakeholders develop long-term plans for redevelopment or other purposes. These are not either/or options but, rather, both/and strategies to foster a real real estate rebound.