The whole world has been facing one the worst recessions of all time. Japanese giants like Toyota and Sony have already declared heavy financial losses in 2008 - the first ever for Toyota since its inception. Lately, Microsoft and Caterpillar have also announced job cuts - 5,000 and 20,000 respectively.
The United States of America is also included in the list of the severely affected countries. Every sector and industry of the country is badly disturbed due the ailing economy; the real estate industry is included in the most affected industries of the country.
The pay freeze practice has been deployed by several firms including the white house - after the instructions of Barack Obama. This recession has brought 2.8 million jobs cut in 2008.
Today, the unemployment rate is 7.2%, which is the highest in the last 17 years. Financial analysts believe that the number of layoffs will continue to grown in 2009 as well.
People are suffering from heavy financial crises and are unable to pay mortgage installments. The number of foreclosures has been increased significantly. In some areas, the mortgage balance amount is more than a home's real worth - an upside down situation.
Fannie Mae and Freddie Mac were already down due to the recession - these two institutions own around $5.4 trillion of the nation's debt - almost half of the overall national home debt.
The home prices decline is unprecedented since the Great Depression of 1930. Consequently, the real estate market has become a true buyer's market. If people can afford a home, they can buy it with 30-40% or even less price which they could have to pay in the non-recession time. For example, in California, the median home price decrease is 38% (between December 2007 and December 2008).
It is recommended that don't take any home buying decision in haste as the home prices in the most areas of the country are likely to be stagnant or go down further. Experts believe that these home prices would not get any upward momentum until the mid of the next decade.
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