Regarding the housing market and bubble that we’ve experienced, there is fault on all sides. Mortgages were handed out to those who probably shouldn’t have gotten them, home buyers were taking out frivolous loans that they couldn’t afford, and home sellers were asking outrageous amounts for their properties because they could. Loans were obtained with zero down which meant the home owner had nothing invested in the property. Easy come, easy go. Nothing lost. Foreclosure city.

During this housing bubble, properties were appraised high allowing room for renovation and consolidation. Home owners were refinancing at ridiculous terms and temporary rates in order to soup up their dreams, pay off debt or buy unnecessary toys. When these homes started dropping in value due to foreclosures and lack of loan programs available, home owners were stuck in their properties. If you can’t sell, you can’t relocate. You can’t get rid of the property if you divorce or if there’s a death in the family. With negative equity, you can’t refinance the home to a fixed rate and get yourself out of that nasty adjustable rate mortgage which caused many to have very high mortgage payments. More and more properties foreclose, and housing prices drop even lower. A vicious cycle. Greed was the main villain behind all of this. Greed on all sides.

So what did we learn from this?

• Not to live above your means or try to.

• Pay attention to what you’re buying and how much it will really cost you.

• If it sounds too good to be true, it probably is.

• Saving for a rainy day is back!

• Just because there’s a product offered, doesn’t mean it has to be obtained.

• Buying to impress others or constantly obtaining things you don’t need is not cool anymore.

• Those who save and build a strong financial future are now the cool ones.

• Mortgage requirements have changed now and this is a good thing.

• In order to buy a home, you need a down payment of at least three percent.

• Loans aren’t given to those with shattered credit any longer.

• Vacations to Hawaii should only be taken if you can afford it.

• Being able to afford it doesn’t mean maxing out your credit cards.

• Everyone has to be more accountable and responsible for their actions. Everyone.

So what is the future of real estate?

We’re not 100% positive. I don’t think anyone is. Right now, steps are being taken to tighten lending requirements, which can only be a good thing. The turn around and stabilization looks to be on its way. With the amount of foreclosures right now and properties being priced astronomically well, it is a great time to buy. If you’re in a position to purchase a home and you have what you need in order, (at least 3% down and decent credit) it’s the time to invest or purchase your own home. Rental property is seeing an increase of demand and interest rates at the moment are incredible. Five percent or below is something we haven’t seen combined with the price of real estate currently. » Read more: The Housing Bubble Explained and the Future of Real Estate