While we don’t hear much as for figures on the current real estate mess, there is much to worry about. News agencies and media have taken notice to a growing number of foreclosures, but very few of the times are actual statistics shown. The best projections have now put California real estate foreclosures at 9 times what they were in 2003-2004 when them market was booming. Even in 2007, with foreclosures numbering 250,000 the figure is almost doubled year to year with an estimated 450,000 homes going under in 2008.

This is a very sobering look at how the housing bubble is coming to an end. Foreclosures mean that houses will be taken by their owners (the banks) and readily resold on the market. If this holds true, California is going to see an additional 450,000 homes on the market in 2008-2009 due entirely to foreclosures. The balance of real estate will quickly turn to the buyer from the seller. In the days of the real estate boom, a house could be bought and sold for a tidy profit in under a month. Now it takes several months to sell a home even at a depressed price.

There is one thing for certain, California real estate will soon be sold on the cheap. Investors and homeowners take notice, an influx of homes for sale will again drop prices. This cycle will put even more homeowners in distress as their HELOC and other mortgage loan debt will be higher than the value of the house. This is known as being upside down, where the amount of debt does not equal the amount of equity in the home.

If real estate prices continue to drop, as they should with the growing supply, more homeowners will have to foreclose. This is a deadly cycle that will repeat itself until the houses find a reasonable market value or until the investment days of real estate come back around. Either way, the market value should be much lower than current value. Selling a home takes much longer now than it did in the boom days, which means more mortgage payments in between sales and more debt for homeowners.

For the seasoned investor, times like this should call for a prudent but optimistic look at buying real estate in hot markets like California. While things don’t look great right now, there will be a sizeable amount to make when real estate hits its lows and supply ebbs. But for now, its best to take a pessimistic look at buying a second home. Until this new supply of foreclosed homes is sold, there isn’t much stopping real estate prices from falling.

Banks typically sell foreclosed homes on auction, which can mean discounts as high as 50% for luxury housing. When people start getting word that homes are selling for $400,000 on a typically $750,000+ block of homes, the rest of the real estate will assume a similar price point.

Today, people everywhere are looking for new and interesting ways to invest their money, in an attempt to get a return on investment or ROI that is much, much larger than what they put in. There are numerous ways to invest in today’s economy, and different investment vehicles tend to appeal to different people. What really seems to matter when it comes to investing is why you are making the investment, or what you intend to use the profits for. Some people simply want to invest for their retirement, while others are trying to build a nest egg for a college education eighteen years down the line, or for a nice vacation in six months.

An investment vehicle which is gaining serious popularity as of late is the house-flipping industry. This is not an investment for everyone, but if you have the time, the know-how and the capital necessary to make it happen, it may just be worth everything that goes into flipping real estate.

Real estate flipping involves purchasing a home for less than what it could be worth, and restoring it to a worthwhile state in an attempt to resell it for more money down along the line. The biggest problem with this type of investment is the fact that it takes a lot of money up front to begin, and you may not immediately see any kind of a return.

If you have some extra money or have the credit to obtain a loan for the real estate you purchase, it may be well worth exploring house flipping as a viable option. You would be surprised at how much money can be earned simply by restoring a poor quality home into something worth much more. If you are patient enough to let the real estate market rise, you may even earn more money off of the sale of each house that you flip.

Are you considering this house flipping idea as a viable option for investing? Research the idea first before you do anything drastic, as there is a lot to know and understand regarding real estate prices, curb appeal and the real estate market before you get started. The more you know about this type of investing and money making, the more success you will find once you determine whether or not to pursue it.

Personally, I have never considered house flipping as an investment idea, simply because I do not have enough money for a venture like that. But it does sound interesting. Either way, it could be a great opportunity if you are looking for something to do, and someplace to invest. As always, be well prepared before getting into any investing venture, and good luck!

Homeowners may find themselves in real trouble due to the consequences of defaults on mortgages, according to Ben Bernanke, who is the Chairman for the Federal Reserve. Today, Mr. Bernanke gave a testimony that he had prepared to the House Financial Services committee, in which he also stated that when the markets correct themselves, it’s usually because of severe financial losses that had been incurred by investors. He pointed out that subprime mortgage market has already been sharply adjusted.

But he also said that the there are measures being taken by the Federal Reserve in order to help reduce the amount of foreclosures and that there was an urgent need to improve the standards for underwriting.

Mr. Bernanke’s testimony came just forty eight hours after the slashing of federal fund rates from 5.25% to 4.75%, and the slashing of the discount rate to 5.25% from 5.75%. He did note that the developments in recent days with regards to the subprime-mortgage industry did trigger some uncertainty about structured products and helped to raise concern about economic activity consequences.

Lastly, he did add that the FOMC will continue its evaluation of the efforts of the developments and will do its best to maintain growth in the economy and foster price stability.