One way to determine if prices are headed up or down is to watch the supply of inventory.  A balance market has five to six months of supply.  Monthly supply is determined by the number of homes sold in a given month divided by the number of homes on the market.  For example, if there are 1000 homes on the market in your area and 200 sold in a month there would be 5 months of inventory.  Based on this finding, prices would be holding steady. 

If there was less then 5-6 months of inventory you would be in a seller’s market and prices would climb.  With a low supply of available homes, buyers would have to outbid each other to get the home.  This is what drives inflation.

It there was more then 6 months of inventory you would be in a buyer’s market and prices would drop.  With an abundance of homes available, seller’s would have to compete with each other causing prices to fall.

Economical factors can also play into which direction home prices go.  According to Realtor.org, ”Traditionally, the national average sales price of a home is two-and-a-half times the average household income.”  During the boom in the real estate market this reached four times the average income.  With unemployment rising, prices may drop more to get us closer to the traditional average.  But the good news is we are getting closer to the two-and-a-half time average.

Pull your credit at www.annualcreditreport.com and you can dispute them online. Or write a letter to all three credit bureaus explaining the discrepancies. Attach any documents you may have to verify the dispute. Contact the company that the dispute is with to see if it was an over sight on their part. Maybe, you could work something out with them.

1. Have a plan and write it down. Ask yourself where you would like to be in five years. Have an idea of where you money is going. Write down everything you spend and what you save.

2. Maximize your 401k plan.

3. Check on your Social Security benefits at www.ssa.gov

4. Power down your debt. Eliminate credit cards, car payments, personal loans. Start with paying off the highest interest rates first.

5. Find out what is on your credit report. Take your name off of the list that generates the pre-approved credit card offer. Contact each of the credit bureaus: www.equifax.com, www.experian.com, www.transunion.com

6. Compound your interest and watch it grow! If you put just $2,000 a year into a Roth IRA or a 401k from the age of 21, you can expect to retire at 65 with almost TWO MILLION dollars in the bank! If you are over 50, you can play “catch up” by contributing at least $3,000 a year. It is never too late to start a retirement plan! Take advantage of tax deferred college savings programs as well. And make sure you are aware of changes in the tax laws.

7. Diversify! Have three to six months of your living expenses readily available by investing in mutal funds or a money market account.