It’s going to get worse before it gets better, but there is apparently a shimmer of light at the end of the national housing market’s long, dark tunnel.

Beginning in 2013, home prices are projected to increase a modest 1.77 percent, according to a survey conducted by MacroMarkets LLC, which is based on the S&P/Case-Shiller index over the next five years. In the foreseeable future, prices are expected to continue to decrease 2.53 percent in 2011 and .13 percent in 2012.

Overall, prices are predicted to grow on average 1.1 percent through 2015, according to the study, which surveyed 111 real estate experts and investment/market strategists, among others, to arrive at its conclusions.

Robert Shiller, MacroMarkets cofounder and Yale University professor of economics, explains the possible reasons for the slow growth:

“Markets and government institutions are visibly struggling to respond consistently to an unprecedented rash of crises and conflicts. These struggles diminish confidence, which compounds the underlying economic stresses and lowers expectations.”

It’s not overwhelmingly fantastic news, but the survey does depict the bottom of the crisis and the beginning of a housing recovery. That upward turn, if it does indeed happen when this report suggests, is a long time coming and well worth celebrating.

Baby steps.

Nasser Daneshvary, director of the Lied Institute for Real Estate Studies, explains the scientific formula that he has discovered regarding the toxic effects of foreclosures on neighborhoods in a recent sit-down with the Las Vegas Sun.

Here’s the snip:

“We know foreclosed homes sell for a discount, but what do they do to the neighborhood? We found out that the first few foreclosures have a big effect, and then five and six and seven don’t matter, and then eight, nine and 10 matter a lot. The negative effect on your value keeps declining until it reaches around 40 homes within a half a mile from you. You have lost 33 percent. More than that doesn’t matter.”

To search foreclosed homes near you and see them all on a map relative to your house click here.

Get ‘em before they’re gone!

CNBC Real Estate Reporter Diana Olick today reports that bank-owned foreclosures (also known as REOs) and short sales — both of which fall under the distressed real estate umbrella — accounted for nearly 50 percent of all home sales in Dec. 2010.

The 47 percent share is up from 44.5 percent in Nov. 2010.

Low interest rates, as well as delayed sales agreements that were finally pushed through after “robo-signing scandal” concerns were alleviated, are the primary reasons behind the major spike.

Thomas Popik of Campbell/Inside Mortgage Finance explains:

“There were signed purchase and sale agreements, and those closings were delayed until the paperwork was reviewed. The major servicers pulled from the market houses that had been listed, and buyers were found. Once those transactions went back on, then they closed, and that’s what bumped up these December statistics so much.”

Keep in mind that home sales are typically down during the holidays, which makes this news even more remarkable because real estate business was actually up 12.3 percent (seasonally adjusted) to close 2010.

To search foreclosed homes and short sale listings for sale in your area click here.

Be sure to hurry … the distressed real estate market is fast and furious. The best deals don’t last long!

Check out the graphic below, entitled “Expectations for Average House Prices:”

Consumer confidence and attitudes are often telling indicators for if, and when, markets will rebound, correct and/or continue on their current trajectories.

This is “good” news for potential buyers and investors — great real estate deals could possibly get better in the months ahead. Historically-low interest rates and other buyer-friendly conditions, however, could start retreating to so-called “normal” levels sooner rather than later.

For buyers looking to push their chips into the middle of the table at the right time, this is turning out to be like a game of chicken. When do you flinch and go “all in” on the house of your dreams?

Each case is different, so there probably isn’t s silver-bullet answer to the age-old question of when to buy. Keep in mind though, that the line is getting finer by the month. And when the correction comes, it will likely come hard and fast.

Don’t be the one on the outside, hanging onto your bag of chips and kicking yourself for not acting sooner. Watch your local market, sign up for our free property email alerts and stay on top of things as best you can.

It will likely payoff in the end … literally.

… according to John Taylor, president and CEO of the National Community Reinvestment Coalition, who tells CNBC.com:

“Foreclosures are the mortal enemy to economic recovery. We can keep on pumping money into the system to create liquidity for banks and in the market, but it’s simply not going to succeed until they plug the hole at the bottom of the well!… If we do not respond to the foreclosure crisis now, we can guarantee the pain that will be felt by most of the people in this country. Families facing foreclosure don’t want a handout, they just want reasonable help. In fact, most of the people that got bad loans, perhaps 90 percent of them, are still paying on that sub-prime loan. Some of them have just simply fallen behind…. If we don’t do restructure their loans and keep people in their homes, property values will drop and everyone will be impacted who owns a home. We need to share the pain now, because otherwise it will affect us more broadly…. The federal government must mandate that the private sector modify certain loans such that they match the borrowers ability-to-pay. Voluntary compliance simply has not and will not work. These new loans should match the incomes of the borrowers so that a responsible borrower has a sustainable loan. Those who have lost their jobs should be given a reasonable period to find suitable employment, and if unsuccessful, have the time to pursue other housing options.”

Does Taylor present a realistic solution to the foreclosure crisis, which he says could balloon to 11 million bank repossessions if the economy continues on its current trajectory, or is it too “pie in the sky?”

To read his entire case for overhauling the current system click here.

… because without sales of homes in distressed areas the “recovery in the housing market stops. It’s frozen,” according to White House Press Secretary Robert Gibbs.

He elaborates (via CNNMoney.com):

“That obviously can have — we believe and others believe — a very negative and detrimental impact to our economic recovery efforts and the housing markets in states that have been hardest hit.”

Of course, foreclosures are a last resort — loan modifications, short sales and all other rescue options should be exhausted before sending properties to the auction block. Additionally, the documentation process needs to be as accurate as possible, which is an issue that several major lenders are addressing right now during the “foreclosure freeze.”

Despite the “freeze” from some lenders, foreclosures are still for sale throughout the nation. And most of them are available to purchase for significantly less than market value.

The fact of the matter is that foreclosures need to happen “for there to be a full housing recovery” and because they are “an important part of ensuring longer-term stability in the market is to enable properties to be resold to families who can afford to purchase them.”

To search foreclosed homes for sale in your area right now click here.

Yes!

The “foreclosure freeze” and subsequent “robo-signing” scandal has unfortunately scared away many would-be buyers and investors from pursuing otherwise fantastic deals in the distressed real estate market.

Here’s the deal: Bank-owned foreclosures — also known as Real Estate-Owned (REOs) — that are still on the market and currently for sale are safe to buy.

These properties have been repossessed and their titles are for all intents and purposes, clean. If there is any doubt, the banks and/or lenders will pull them off the market to investigate the individual situations.

Sure, some banks such as Bank of America temporarily put the breaks on all foreclosure sales to err on the side of caution, but even it has started to get the important process moving once again.

And what if, in a rare instance, you purchased a bank-owned property that happens to be the subject of a “wrongful foreclosure” case? As long as you and the lender have title insurance, which is typically mandatory in all home purchases, you still keep the house.

Bankrate.com explains:

“To the extent that a borrower who was foreclosed upon has recourse, it’s against the foreclosing lender, and they can seek monetary damages. But the property’s gone…. The current owner who got title insurance — they get to keep the property. They’re a good-faith purchaser.”

The moral of this story is relax! Don’t be scared of searching and purchasing foreclosed homes directly from lenders/banks. Bank-owned foreclosures/REOs are indeed still for sale, and more than likely, available at significantly reduced prices.

Proceed with confidence! And you can start today on Foreclosure.com — CLICK HERE.

FREEZE! Don’t move a muscle.

That’s exactly what J.P. Morgan Chase, which is among the largest banks in the United States, intends to do as it sorts through stacks of potentially-flawed foreclosure paperwork, according to the Washington Post.

About 56,000 borrowers in 23 states will be granted temporary reprieve from possible eviction while the bank investigates claims about “forged documents and signatures and other similar problems are being used to try to overturn court-ordered evictions.”

Apparently, serious questions have been raised about whether or not the foreclosure files were properly assembled and if the employees who signed off on/executed the documents even reviewed them.

In fact, a J.P. Morgan Chase employee recently admitted that “she and her team signed off on about 18,000 foreclosures a month without checking whether they were justified.”

Sounds like a big mess.

At least J.P. Morgan Chase is doing the right thing now to fix whatever mistakes or oversights it may have made in the past. Expect other lenders/banks to follow suit as the lens on this issues begins to sharpen.

And foreclosures, short sales and other distressed situations looming on the horizon are to blame, according to a report today from the Associated Press, which cites The Standard & Poor’s/Case-Shiller 20-city index.

Here’s the gist:

” … the peak home-buying season is now ending after a dismal summer. The hardest-hit markets, already battered by foreclosures, are bracing for a bigger wave of homes sold at foreclosure or through short sales…. Add high unemployment and reluctant buyers, and the outlook in many areas is bleak. Nationally, home values are projected to fall 2.2 percent in the second half of the year….”

Sounds like yet another perfect storm-like situation.

Here are the major markets expected to feel the pain the most:

• Port St. Lucie, Fla., and Reno, Nev., where prices could fall 7 percent over the next year.
• Orlando and Daytona Beach, Fla., which face price drops of at least 6 percent.
• Las Vegas, which led all declines in the latest report, is also expected to post a 6 percent drop. Home values there have already tumbled 57 percent from their peak four years ago.

This, naturally, will likely create more foreclosure inventory, which typically drives down collective home prices because distressed sales are almost always available for much less than current market value.

In fact, it’s projected that 2.4 million distressed properties will be sold next year nationwide, accounting for nearly half (45 percent) of all home sales. This is of course good news for first time homebuyers, investors and speculators, who can continue to take a “wait and see” approach and strike when the iron is hot.

We suggest checking out our free foreclosure email alerts, which will notify you if and when a great deal in your area hits the market. To be notified all you have to do is click here.

Major mortgage backer Freddie Mac recently estimated about 4 million new and existing home sales for the third quarter of 2010, which would mark a 20.7 dip from the same time last year and a 23 percent slide from the previous quarter.

Government stimulus, or lack thereof, is believed to be the primary culprit, according to HousingWire.com. The homebuyer tax credits both expired in April.

Poor home sales, as well as rising delinquencies, have pushed prices down overall. That’s great news for buyers, but at this stage — with the unemployment rate still high and money tight virtually all around — it seems that the pool is still super shallow.

It’s an ideal climate for investors in speculators, however. In fact, the recently-introduced “First Look” program was designed to help communities and traditional buyers beat cash-laden opportunists to the punch, providing them with much-needed time to land the best deals before they are gobbled up.

To check out the best distressed real estate deals in your area today remember that you can search Foreclosure.com free for seven days. You can start right here.