Our local real estate market has been experiencing a reduction in volume starting in 2005 and continuing through September 2009. This has resulted in a longer marketing time and consequential price reductions, following state and national patterns. The local pattern in 2009 indicates a leveling off which may indicate a market bottom. Based on the law of supply and demand, the trend will likely correct itself especially if interest rates remain low.

Fortunately, the market value of real estate has no direct effect to those who are not trying to sell.

This is a great buyers market with many opportunities for the buyer, especially with the present low interest rates. Most home sales are bank owned and usually at discounted prices. We give advice below on the purchase of these properties.

According to a recent report on the economy, issued by the Calaveras County Taxpayers Association, due to massive federal spending and the resultant need to inflate our money, we will likely see substantial price increases in the coming years. In addition, we may experience market based real estate value increases due to increasing demand from the Bay Area and reduction of supply. This is partly due to local regulatory problems, according to the local housing/development industry. The state government is attempting to increase taxes rather than curtail expenditures, this will depress our economic recovery and prolong our present slow market.

Buyers and Sellers have real questions on what to do. My advice to each is:

AS A BUYER, now is the best time to buy as you may save 30% - 50% in price and still have reasonable financing available. The financing market is tending to be more conservative due to a large number of foreclosures. Look for price reductions, which will happen when Sellers have equity and are more concerned about selling than price. Be sure to get pre-qualified with a lender and stay current on what loans are available.

Many homes have loan balances higher than present value. "Short Sales" occur when the lender will allow the loan to be paid off at a lower amount rather than lose more money in a foreclosure sale. However, this process is problematical and time consuming. It is better to buy clean at reduced prices. If you buy bank owned property, please bear in mind that these are offered "as is" with no disclosures of known problems. We recommend home, pest control and septic inspections. The purchase should be subject to Buyers approval of the estimated repair expenses. You will need to be pre-qualified by a lender and be able to substantiate funds available for down payment prior to submitting an offer to the bank.

AS A SELLER, now is not the best time to sell. If possible, postpone selling for a year or two. If you are in foreclosure, talk to your lender about the possibility of a renegotiated loan, or "short sale," or deeding your property to the lender to avoid a foreclosure sale. This is better than walking away from the obligation and will be better for your credit. Find an agent familiar with "Short Sales."

If you have equity, list your property at a value similar to the other listings and then reduce the price to a value comparable to actual sales. Be sure the price reduction is well advertised.

If this is your home, start thinking of it as simply a house you own and clear out all clutter. Remember, you are selling a "house" but the buyers are buying a "home" for their own clutter.