By Amanda Janney

Skepticism continues to mount in regards to the possibility of an approaching housing recovery, and economists agree.
CNBC reported that new-home sales rose 11 percent this spring after a historically bad winter in home sales in almost a half-century. While this increase was welcomed after a three-month steady decline, it still falls short of the target that economists consider “healthy” — 700,000 a year.  And, even though last year marked the fifth consecutive year of declines in new-home sales, economists don’t see a return to health in the near future.
In effect, it looks like this market will continue to challenge property values.
As a seller in this challenging market, pricing your home to compete with the overabundance of compromised sales may be quite the battle for some and nearly impossible for others as foreclosures and short sales cripple the fair market values of surrounding homes.
Compromised sales are those that are bank-owned, short-sales, or for sale by large lenders like FHA, Freddie Mac, Fannie Mae, and VA. It is predicted that 40 percent of all sales this year will be some type of “compromised” sale, and currently 23 percent of all the homes on the market are compromised.
Because these properties are priced
8 to 20 percent below what the average sellers want for their homes, competition for the sellers is fierce.
In Hampton Roads, Tidewater and surrounding areas there are approximately 20,039 properties on the market with 13,354 entering the market in the last six months. Only  8,157  properties of the 20,039 listed have sold in the last six months.
Of the 20,039 properties available, 1,650 are pending closing, meaning we have a full year’s worth of properties available. With so many properties sitting on the market and prices being reduced again and again to remain competitive, it’s no wonder current homeowners are awed by the loss of equity in their investment.
Trends show that what is selling in this interesting market are homes priced in the bottom 8 to 15 percent of all homes in each price range, and with Internet searches allowing home hunters to search by price, homes need to be priced to move in this market.
In a market run by foreclosures, home hunters can find “fixer-uppers” and even recently updated homes priced in the bottom 10 percent of the market.  If you can buy what you want at the bottom 10 percent of the price ladder, why look any further?
If all of these numbers have boggled your mind, let me assure you of this. In this market, it all depends on which side of the fence you are on. As a buyer, the world is a gold mine. Daily, I hear from buyers who are awed at the bang they can get for their buck in this market. As the old adage goes, “One man’s loss is another man’s gain.”
Thanks to this challenging market, many whose homeownership dreams were simply a tiny flicker at the end of a very long, dark tunnel can buy a home. Many smart buyers are getting a steal on foreclosed properties, adding a little TLC, and in many cases, walking into instant equity.
So, with clashing groans from current home-owners and cheers from buyers reaching historic decibels, we can expect this bittersweet tune to linger a while longer, as economists see only a continuation of current market conditions in the near future.