From Elizabeth Weintraub,
Your Guide to Home Buying / Selling.
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Housing prices took a 24% nosedive during the Great Depression of 1929. In hindsight, that housing recession was not really a good time to buy real estate in the short term because the recession lasted 10 years. It was long enough that some survivors still fold up and save pieces of used aluminum foil.

All other recessions since 1929 lasted a period of two years or less. Many of those recessions shared falling stock prices, high interest rates, high unemployment rates and a loss of consumer confidence, along with one other common trait: They were all good times to buy real estate.

Buying Homes in the Midst of a Housing Recession

When prices fall, the question is not really how low can they go but how much real estate can you buy before they go back up. If you are buying a home during a housing recession, getting a good price is just as important as being able to hold and ride out the housing recession.

Here are strategies that can help you make a wise decision and capitalize on falling prices:

• Buying in a Down Market
  How to figure out if it makes financial sense for you to buy when prices are falling. If prices haven't hit bottom yet, how to tell where the bottom is likely to rest, and why it might not really matter.

• Looking at Overpriced Homes
  In depressed markets, it's not unusual for some sellers to price their home too high. If you spot a home that's been languishing on the market, it might warrant a second look. Here's how to tell.

• Buying Distressed Sales in a Housing Recession
  Foreclosures, short sales and REOs: differences. Buying distressed properties under market value. Which is more profitable for a buyer -- short sales, foreclosures or real-estate-owned (REO's)? How CA law affects foreclosure sales.

• Before Buying a Short Sale
  Before you buy a short sale, read about your rights. Why the seller's lender needs to approve a short sale and how to understand what is involved in closing short sale transactions.

• Buying Post Foreclosures: REOS
  How to buy a foreclosures / REOs from the bank. Negotiating offers for bank owned homes. Difference between REO homes and short sales. Hiring an agent to buy REOs.

Drawbacks to Buying in a Housing Recession

Not every home you spot for sale will be a good buy. Some might require extensive repairs or be located in the wrong neighborhood. The key to buying a home is and always will be location, location, location, followed by condition.

Here are precautionary tips for home buyers in a housing recession:

• How Defaults Hit Market Value
  Mortgage defaults affect home values. Nearby homes often feel effect of foreclosures, especially if many foreclosures have been filed. How to help an appraiser use the right comparable sales when selling a home in a neighborhood faced with recent foreclosures.

• Drawbacks to Buying Foreclosures
  The condition of homes puchased at auctions or trustee sales. What can a buyer expect and prepare for when buying a home without an inspection.

• Stripping Foreclosure Homes
  Fixtures are real estate because they are not personal property; they are affixed to the land, to the house, which means fixtures stay with the house. But that doesn't stop some desperate home owners from smashing walls to rip out Romex wiring or copper pipes and selling them for scrap in back alleys.

• Ways to Lose Your Home
  Whenever a housing recession hits, the crooks crawl out of the woodwork. How not to fall for gimmicky schemes. Top home buying and home financing mistakes, and how you can avoid making a home buying mistake.

• Buying Fixer Uppers
  Some of the lowest-priced homes will be those that require extensive repairs. Here is how to buy home that needs fixing up, and how to tell the difference between a major rehab or a home that requires small cosmetic fixes.