If you’re in the market for a new home, your timing couldn’t be better. While the current market may not be ideal for sellers (okay, really not ideal), it offers a great opportunity for buyers. You’re in a particularly good situation if you’re a first-time buyer and don’t have to worry about unloading an existing home for a decent price. Read on for a glimpse into the current state of the buyer’s market and discover why it just might mean a stellar deal for you.

A glimpse at the current state of the housing market

Marketing analysts recently put together an overview of how the housing market has been impacted in the past few months. The results are striking and make it more apparent than ever that we’ve settled down into a solid buyer’s market.

For starters, more than $27.4 billion was cut from housing list prices at the national level. Yet despite this imposing figure, it’s important to note that the amount shaved off list prices varies dramatically between cities. For example, San Francisco only had a total of $110 million cut from housing list prices while Manhattan dwarfs that figure with a whopping $1.1 billion in reduced listings.

Of all the markets to be hit, the luxury market was hit the most. This largely stems from the great decline of the stock market over the last 12 months which effectively left a significant portion of the country’s wealthy reeling. Taken from a numerical standpoint, the luxury market saw an average of 15% shaved off housing prices, which translates to a loose reduction by $300,000 per home.

As far as big cities are concerned, single family homes have been hit just as hard as condos. In the case of both dwelling types, homes for sale by owner are feeling significant competition from foreclosed homes for sale. Because foreclosed homes offer such low prices, those trying to sell their homes in good faith are being forced to sell their homes for less and less.

Overall, home prices have plummeted to levels seen in 2002. Although existing home sales rates are beginning to show some promise of increasing (they rose a slight 2.9% in the past two months), median prices are still down 15%. Approximately half of those sales came from foreclosures and short sales.

Why it’s a great time to be a buyer

Roughly 50% of new home sales in the past few months have been driven by first time homebuyers. The top two reasons for this trend are the low prices posted in the market and the large pool of homes to choose from.

If you’re considering buying, the time to begin taking action is now. Follow these three simple steps to make the process quick and successful:

1. Find out whether you qualify for a first time homebuyer tax credit. The Obama administration recently unveiled a stimulus plan that included over $7,000 in tax credits for first time homebuyers. This move effectively allows new buyers to shave over $7,000 off their purchase price. Note:  you may still qualify for this credit even if you’ve purchased a home before. Look into the details and take advantage of what you can.
2. Find out what you can afford. The downside to this down market is that credit isn’t as readily available as it was in previous years. Talk to a lender and find out just how much credit your credit score will qualify you for. Stick to this price as your upper limit and don’t go beyond it.
3. Take your time. Don’t be fooled into thinking you have to act fast to buy a new home. The market will be slow to turn around, so thoroughly search the housing inventory in your city. If you find a home you like, think your decision through before you make a bid.

How to effectively compete as a seller

If you’re trying to unload a house in this market, the plain truth is that you may not make a lot of money on your home. Despite that, it’s still possible for homes for sale by owner to compete and land a fair sale. Follow these guidelines if that’s your goal:

1. Take the emotion out of your pricing. It’s likely a fact that your home isn’t worth what it was a few years ago. Accept this and don’t focus on what your house used to be worth. Instead, plan on pricing competitively. Look at sales prices and foreclosure levels in your current housing market and base your pricing decision on real-time factors.
2. Reach out to new homebuyers. A huge percentage of new homebuyers are shopping for homes online, so make sure you post your sales price and home details on the Internet. You might also consider posting a virtual tour of your home, or at least make sure you include pictures of your home with your listing.

All things in good time

As always, it’s important to remember that the market is fluid. It won’t be a buyer’s market forever, so the time for new buyers to begin looking is now. Similarly, a seller’s market will someday return, so future sellers can have some incentive to look forward to as well.