A new home for the holidays?
The weather outside may be frightful, but that doesn't mean home shopping at this busy time has to be. True, fewer homes are on the market around the holidays as sellers take some time off to enjoy the season with their family. And fewer open houses are held during the often freezing, messy weather.
 
  • Interest rates are typically lower than in the spring.

  • Lenders, agents and others have more time to work with you.

And best of all, she says, although moving during the dead of winter might not be so pleasant, relaxing on the patio of your completely unpacked home when the weather warms up is priceless.

"Get it over with when there's nothing else to do and then enjoy your spring and summer," Helfant-Browning says.

Best and worst places to buy
It's been a roller-coaster year in real estate, with sales plunging and prices dipping. It's enough to leave most buyers too scared and queasy to act. But the outlook isn't the same for everyone. Some markets have hit bottom and are trending up, making it a good time for buyers to pull the trigger. In other markets, well — better luck in 2012.

We asked the folks at Local Market Monitor to share their predictions for the five best and worst markets for those who are ready to buy now. LMM analyzes more than 300 housing markets and identifies markets that are "suitable for investment" or "dangerous."

The 5 worst markets
While the U.S. overall is expected to see a 1% drop in home prices next year, according to LMM, these markets — with a population of 400,000 or more — should fare worst. (Hint: It's looking like dark times for the Sunshine State.)

  1. Deltona-Daytona Beach-Ormond Beach, Fla.: The average home price is predicted to drop a whopping 11% over the next year from the average actual home price of $146,234 at the end of the third quarter.
  2. Lakeland-Winter Haven, Fla.: A 7% decline from the average actual home price of $139,734.
  3. Orlando-Kissimmee, Fla.: A 7% decline from the average actual home price of $180,900.
  4. Boise-Nampa, Idaho: A 7% drop from the $162,016 average at the end of the third quarter.
  5. Reno-Sparks, Nev.: Down 7% from $188,286.

The 5 best markets
And which areas did LMM pinpoint as having the best prospects for buyers in 2011? (Don't get too excited. The good news here isn't great, but it's better than the alternative.) 

  1. San Diego-Carlsbad-San Marcos, Calif.: The average price in this boom-and-bust market is predicted to increase 1% over the next year from the average actual home price of $336,679 at the end of the third quarter.
  2. Oklahoma City: Homeowners here will be OK, with an increase of 1% in 2011, from an average of $156,948.
  3. Tulsa, Okla.: No risk here: Prices will stay flat next year at $151,384.
  4. Cincinnati-Middletown, Ohio-Ky.-Ind.: Ditto for this area: Prices will remain flat, at $175,347.
  5. Lexington-Fayette, Ky.: This is a market at bottom: Prices here will decline about 1% from the average actual home price $183,084.

What? A decline passes for good news? I guess it does in today's dismal market. There were also signs of easing in some of the nation's most distressed markets, including Phoenix, Atlanta, Chicago, Detroit and Minneapolis. LMM expects prices in those cities to dip more modestly next year than it had predicted just one quarter ago. 

So raise a glass and toast the end of the worst — or if you're in Daytona Beach, just drink enough spiked eggnog that you forget about real estate altogether.

Are foreclosures really a good deal?
Foreclosures may be weighing on the market and dragging down prices. But how sweet a deal are they for buyers in the market right now?

Pretty sweet, say the folks at foreclosure data firm RealtyTrac. In fact, the deals have gotten better as sales have slowed.

The average sale price for a home in some stage of foreclosure was more than 32% below the average sale price of homes not in foreclosure, a better bargain than the 26% discount in the second quarter and the 29% discount in the same period last year. In some states, such as Ohio and Kentucky, bank-owned sales should have been called fire sales, with an average discount of 51% below the average sale price.

That's in part because of the drop-off in sales since the first-time homebuyer tax credit ended midyear. A total of 113,933 bank-owned properties were sold in the third quarter, according to RealtyTrac, down 26% from the previous quarter and 35% from the previous year.

Foreclosure sales accounted for 25% of all U.S. residential sales in the third quarter. But in some states they dominated the market, such as Nevada, 54% of all sales; Arizona, 47%; and California, 40%.

If those discounts continue, it could be bad news for other sellers, but great news for prospective buyers, especially in light of today's rock-bottom mortgage rates.

The time for a great mortgage rate is now
Indeed, the average rate on a 30-year fixed loan during the last week of November 2010 was 4.4%, according to Freddie Mac's weekly primary mortgage rate survey. That's up from a low of 4.2% in early November, but lower than it was for the entire first half of the year.

And that may be as good as you're going to get, according to the Mortgage Bankers Association. It forecasts that rates will slowly rise to just over 5% by the end of next year.