Foreclosures are expected to increase nationally in 2011, but Connecticut is one of the states where rates are going down. The Norwich Bulletin reports that the number of foreclosed properties has fallen 62 percent over the past year and 25 percent since December 2010. Connecticut ranks 39th out of 50 states for foreclosures on the market.

Connecticut foreclosures are still prevalent in many areas, and not only in cities like Hartford and Bridgeport. Windham County, in the eastern part of the state, has been considered the most troubled, with one in every 1,350 homes in foreclosure, according to the Bulletin. For those anticipating foreclosure, the state is offering classes for homeowners with difficulties. For real estate agents, foreclosures are still properties that can be sold, and in March, a CT REIA seminar will focus on rehabilitating and selling such homes.

Starting on February 17, classes for homeowners with mortgage difficulties or facing foreclosure are being held in the state. After this point, classes will be held on the third Wednesday of each month in a different location in Connecticut and are helpful for homeowners approaching the foreclosure process without legal representation.

CT REIA recently announced a seminar for real estate professionals interested in selling foreclosures. Held on March 5, the seminar will feature Robyn Thompson, a national lending expert who buys and renovates homes and sells them for larger profits, as the speaker. Thompson has rehabilitated more than 300 properties over the past 14 years and, in the seminar, will offer tips for fixing up properties, appreciation, and selling to a smaller pool of buyers.

Out of the “insider secrets” the CT REIA says Thompson will reveal include her strategy of “buy[ing] low and then rid[ing] the appreciation to the top.” Buying, rehabilitating, and appreciating is not a singular strategy, however, and as the economy is stagnant and the pool of homebuyers smaller, Thompson will address adjusting selling approaches for foreclosures.

Much like the banking industry experienced severe revisions over the past two years, the real estate industry, particularly home buying, may go through a similar type of change over the next few years, according to a story in U.S. News. Government regulation of real estate, with practices and standards that have been in place since the 1930s, may change, taking a lesser role than that of the present. The U.S. News piece provides more details, but with less government involvement in real estate, some of the changes homebuyers may experience could include:
• Increased mortgage rates
• Formal down payments on loans as much as 20 to 30 percent
• Less federal backing for high mortgages
• Fewer 30-year rate fixed mortgages
• Fewer homeowners and more foreclosures
• Fewer investment, or “volatile,” properties

When it comes to being a homebuyer, these changes may have a significant impact on buying a home in any state. Generally, the process for looking and purchasing a home presently includes:
• Defining what you want out of a new home
• Checking your credit, getting pre-approved for a mortgage, and finding a lender
• Finding an agent
• Looking at homes for sale
• Escrow, inspection, and appraisal
• Moving in

New changes, then, would impact steps two and six of the home buying process. Obtaining a mortgage would be more difficult, and interest rates, which were low before the housing market collapse and are still relatively low in the present, may be higher than those currently.

Securing the home through escrow, similarly means a larger down payment. If the home you want to buy is $200,000, a 20 to 30-percent down payment would be $40,000 or $60,000.

If you’re planning to buy a home, what does this mean for you? At the moment, these are simply predictions – not actual changes to the real estate industry. Nevertheless, it means that, if you plan to purchase a home in the future, be prepared to expect higher rates and a significant down payment.

Could commercial real estate be the key to influencing home buyers? Perhaps not directly, but companies hiring (and, in return, buying up more office space) decreases the unemployment rate and puts more individuals in better financial positions for purchasing homes.

The key, of course, to purchasing real estate is the need for jobs, and some industries or companies are still tepid to hiring. Industries not following consumer trends, such as tourism from the Post and Courier piece linked, have a greater chance of purchasing space. Education is one such industry, and an article from the Knoxville News Sentinel details a college purchasing vacant space to expand their class offerings. South College purchased a former clothing headquarters and used a significant portion of the space, although more office and warehouse space in the building is empty and for sale.

Presently, 17.6 percent of office space is vacant nationally.

A few weeks ago, we commented on an article by Susan Lawrence, the President of Real Estate Strategies, about the unfounded optimism in the recovery of the housing market. Lawrence essentially stated that, since the beginning of 2009, the real estate market has experienced an ebb and flow pattern: A minor increase, perhaps caused by a first-time homebuyers’ tax credit, is followed by another small drop. The market, then, just ends up staying in the same place.

Buying power by the general public is the second half of her argument, and until fewer than one in ten people are unemployed (and those underemployed earn more) and layoffs no longer loom overhead, the average person has no incentive to purchase a new home.

Foreclosures, additionally, bring down the average price per home and, in some areas, are half of all properties being sold. Even though the crash of 2007 is long past, foreclosures are expected to increase in 2011, counting for about 1.2 million of all homes sold.

You decide to put your home on the market, but aren’t sure about how to sell it. Putting it up yourself seems financially practical but is also time consuming. Using an agent or broker, however, costs money, and how can you be sure he or she will give you the best deal? 80 percent of sellers do decide to go with an agent, according to an article in Housing Predictor by Lois A. Vitt, but selling a home on your own and with an agent both have advantages.

If you decide to go on your own, you will end up saving money and will not need to give the agent part of your sales. At the same time, however, you need to be knowledgeable about the market and selling your home before you start seeking out buyers. Vitt suggests asking yourself about your availability – for in person and on the phone discussions – for potential buyers. Also, how much do you know about home buying and selling procedures, and do you know how to sell your home on the internet?

Frustration and extensive research may result if you decide to sell your home on your own, but agents are knowledgeable about the market from the start and try to give you a faster and fair sale on your property. Additionally, he or she often has more access to a greater pool of buyers and knows how to market the property in print and online.

Before you go with an agent, Vitt suggests, interview several in your area, and find the best fit for your search. However, before you start contacting agents, fully understand the real estate process and services an agent can offer you. A standard internet search brings up several agents in your area, and before you make a commitment, see what each REALTOR® has to offer.