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I'm still in the process of getting a house, so I thought I'd provide some insight into how I see the market since I'm in the thick of it. I'd like to start by saying that what the news says is false, with a little bit of truth. It is true that the housing prices have dropped a lot, which is mainly due to the amount of foreclosed homes on the market. But homes in the low range (<400k) are selling like mad, especially in Ventura County (California). So the market is still moving, except house prices have dropped. In my mind it is a good thing that the price of homes has dropped, as it allows more people to move into homes they can afford. The market the past couple of years has been insane with homes in the 500k+ range, even for small homes. Thats a half-million dollar home. How can someone who makes even 100k a year afford that type of home? Well you finance it at a low rate, with nothing down, which will adjust at some point to a higher rate. Thats why the market crashed, the high price of homes that was out of proportion to incomes in California, it couldn't go on forever. Now we're here.

There are a few problems that we've encountered while looking for a home. One is that there are now a lot of sharks in the market. We've seen people out looking for an investment property since houses are much cheaper now. When we submit an offer there are usually multiple offers, some of them cash offers. It makes it hard for us to get something within our price range and it just plain sucks. But these people have been doing this even in the higher-priced market, so its expected. Another problem we've hit is pre-approvals. I have preapproval from americorp financing, but apparently that isn't enough. We're bidding on foreclosed homes, owned by banks. So what do they want us to do? Get pre-approved through them! On the outside they want preapproval so they can ensure the property will close escrow, so if your financing goes through you have them to finance through. But I have another theory. The big one I've had trouble with is Countrywide, the leader in foreclosed homes. So much so that they have their own marketplace set up to sell their newly acquired assets. Plus they want you to get approval through them… so you might end up getting a loan from them… so they keep the property under their title (or lien, or whatever) and let you rent. If you're lucky and you pay off your loan, they get income from the interest on the loan. If you don't, they repocess the property, still getting something from the interest and resell to another chum. Sounds like a profitable business. But thats just a theory. More updates when they happen.