The current real estate market is what I would call a bit crazy or even whack. This property lunacy has went on for about 7 years now, and there appears to be no end in sight.

There is no rhyme or reason to what home values and sales are doing across the country. The only thing that makes sense to me is that it is being consciously manipulated by both banks with their shadow inventory, and real estate investment firms lurking in the shadows paying ungodly sums for homes in cold hard cash.

All the while, home buyers, real estate agents and loan officers fight over the lack of inventory and home buying scraps.  Many times these battles are hard on all parties involved because more often than not, you will have to put many offers on properties before you are able to officially go into escrow and close the deal. This is much easier said than done.

These bidding wars appear to be happening on just about every decent valued home that comes on to the MLS in many of the major hot metro areas all across the country. As they say, real estate is all about location, location! But does location, location equate to good values and smart home buying sense, or house hunting lunacy? I think it may be a little dash of everything because the American Dream of homeownership can be a reality that makes sense for some home buyers. But sometimes it may not always be the smart choice for your future living reality.

Maybe it is just the large metro areas of the country where people want to buy a home that are the problem? Meaning, that in these locations there are just too many people, too few homes, and too much competition to find a good value you can truly afford.

For example, Zillow had just come out with an article, “More than Half of For-Sale Homes in Seven Major Markets are Currently Unaffordable for Typical Buyers.” In the article it discusses how home buyers are having extreme trouble finding a house in Southern California, the Bay Area, Denver, Colorado, Portland, Oregon & Miami, Florida and that in the near future, many more communities will become unaffordable as mortgage rates rise.

Here are some pertinent quotes for you home buyers out there from Zillow:

Among the 35 largest metros nationwide, more than half of homes currently listed for sale[ii] in Miami (62.4 percent), Los Angeles (57.2 percent), San Diego (55.3 percent), San Francisco (55.2 percent), Denver (52.8 percent), San Jose (50.9 percent) and Portland, Ore. (50.3 percent) are unaffordable by historical standards.

Nationwide, just one-third of homes (33.6 percent) are currently unaffordable, and in many metro areas, the majority of homes remain more affordable now than they have been historically for buyers making the area’s median income. But as mortgage interest rates rise along with home values, affordability will worsen, and buyers will need to spend ever-larger shares of their incomes to buy increasingly expensive homes.

Home buyers making the median income in Los Angeles, San Francisco and San Jose should already expect to pay a larger share of their income today toward a mortgage than during the pre-bubble years. Zillow expects mortgage rates on a 30-year, fixed-rate mortgage to reach or exceed 5 percent by the first quarter of 2015. Assuming rates at that level and another year of forecasted home value growth, home buyers in San Diego; Riverside, Calif.; Portland, Ore.; Sacramento; and Miami will also soon be paying a larger share of their incomes to their mortgage than they were during the pre-bubble years.

Welcome to the market of home buying in 2014. The odds and inventory are simply stacked against you, but that doesn’t mean it is a futile endeavor. The key factors in making a good decision are based on being educated, prepared and having the right professionals working for you.

This is why having the best real estate agent and mortgage loan officer representing you the most important things you can do. To be competitive, you need competent professionals on your team who know exactly what they are doing so your chances of finding, and actually buying a home will go up dramatically.

The first step in the home buying process is having a good loan officer on your team who can get you prequalified for a good mortgage. That way when you do make an offer, it is a solid one that the seller and their agent will know you have the ability to get a loan in a timely manner. This is very important to in staying on top of the home search game. If you need a great mortgage rate and awesome loan officer to help you or to get prequalified to buy a home, then please call LoanSafe today at 800-779-4547 .