It’s high noon at the OK Corral for home buyers. Sellers have dropped their guns (and their prices) to attract buyers!

Home values are falling at an accelerating rate in many cities across the U.S.

The Wall Street Journal’s latest quarterly survey of housing-market conditions found that prices declined in all the 28 major metropolitan areas tracked during the fourth quarter when compared to a year earlier.

Home values dropped the most in cities that have already been hard-hit by the housing bust, including Miami, Orlando, Atlanta, and Chicago, according to data from real-estate website Zillow.com. But price declines also intensified in several markets that so far have escaped the brunt of the downturn, including Seattle and Portland, Ore.

Where Housing Is Headed

 Because of the drop in housing values, there is a great deal of opportunity in the housing market for consumers. Millions of homeowners are in some stage of foreclosure or are seriously delinquent on their mortgages, and millions more owe more than their homes are worth. Real-estate agents are bracing for an uptick in distressed properties hitting the market, including foreclosures being sold by banks and homes sold by owners via a short sale, in which banks agree to a sale for less than the amount owed.

 

Sales of foreclosed homes are partly responsible for reducing home values because banks tend to cut prices quickly to sell the homes. Sales of foreclosures slowed in some markets at the end of last year as document-handling problems raised questions about their foreclosure processes. But that could change as banks pick up the pace of foreclosures.

 

Real-estate agents say that the threat of future price declines has led to a months-long standoff between buyers and sellers. With home values at such depressed levels, how much longer can this last.

 

Sellers historically have spurn what they see as low-ball offers, while buyers were demanding discounts because they are “convinced prices will drop further, and they don’t want to feel like suckers six months later,” says Glenn Kelman, chief executive of Redfin Corp., a Seattle-based real-estate brokerage that operates in nine states. The result is that “it’s high noon at the O.K. Corral on every single transaction.”

 

But more and more, sellers are dropping guns and their prices to meet the demands of buyers and sell their homes. Agents say that sluggish housing markets are requiring sellers to become much more realistic about setting prices that will spur deals.

After receiving no offers on a three-bedroom home in Oceanside, Calif., during the first week on the market, real-estate agent Jim Klinge convinced the seller to slash $30,000 from the price, to $420,000. That drew two full-price offers, and the home sold last week in an all-cash deal. “The drop in price was critical to reignite urgency for buyers,” said Mr. Klinge.

 

Since the housing bubble burst, there has never been a better time for buyers to take advantage of depressed real estate prices. Whether they are new parents or empty nesters, sellers know that they have to deal with the price levels that are in the marketplace.

So how can you be sure that you are getting the lowest possible price as a buyer. Well, there are two things going for you as a buyer. First, sellers have truly re-adjusted their expectations on prices and many of them have to make changes in their lives. Some sellers were able to put off a job change, birth of another child or downsizing their living arrangements for a year or so. After three years, people have to sell their homes because of life decisions.

Second, if you cannot find a property with a good price that is being sold by the occupant, you can find a variety of foreclosed or short sale properties. After paying the real estate taxes, electricity, heat and maintenance on their foreclosed homes, banks are starting realize that they are not really in the business of owning property. Banks that could not make up their minds on an offer or who moved at a glacial pace have now begun to act rationally and lower prices to sell properties. There are some absolutely beautiful foreclosed properties at bargain basement prices.

 

Well, that is all good news, but how do I know that I am buying at the absolute bottom? The truth is that you cannot time the market to find the absolute bottom. Stock, bond, mortgage and real estate markets cannot be timed. If you  try to time the market, you may miss out on a property that you love or worse yet, have prices rise as you wait!!!!!!

 

Bottom line: If you are ready to explore the benefits of buying a home, now is an amazing time to do it with low mortgage rates, realistic sellers and a large foreclosure market. There are deals everywhere. There are not guarantees that you will get the lowest price, but the odds are that you will feel good that your got a great home at a good value. It is the O.K. Corral, sellers have dropped their guns and buyers have a great shot at getting excellent values.