Sales of existing homes in the U.S. fell last month to the lowest level in at least nine years, signaling the housing slump is deepening and will weigh on growth in 2008.

Resales declined 0.4 percent, less than forecast, to an annual rate of 4.89 million from a revised 4.91 million in December that was higher than previously reported, the National Association of Realtors said today in Washington. The group began record-keeping for this measure in 1999.

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The credit markets are seizing up and the uncertainty recently drove up short-term interest rates for municipalities and some rock solid institutions such as New York’s Metropolitan Museum of Art to 20%. And now even so-called prime borrowers, the ones who were properly vetted, are being sucked into defaults on their mortgages. Yet it’s still a relatively small number of institutions and individuals getting hurt by this not-yet-a-recession. So what’s the worst that could happen?

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Property sharks looking to take advantage of local housing slumps are doing their best to time the market, searching for the precise moment when prices bottom out before taking a bite.

They’d be smart to look for markets where job growth is strong, foreclosures are relatively low and inventory is high. With these factors in place, buyers can still dictate terms of sale and negotiate prices, but aren’t as exposed to the economic and lending risk problems that have sunk many markets around the country.

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Despite the housing slump, most middle income workers still don’t earn enough to buy a median-priced home in their hometowns, according to the Center for Housing Policy.

The center, an arm of the affordable housing advocacy group of the National Housing Conference (NHC), compared housing costs in 201 metro areas with the median wages in those areas for 60 major vocations, such as police, firemen and teachers.

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The housing crunch and the excessive inventory–exceeding 10 months on resale homes–continues to take its toll on housing prices. But over the long term, housing is still a good investment. In fact, it’s more than an investment; it’s a home. Plus, you’re not really saving anything by renting, as the costs of renting and owning are about equal (well, owning may be a little more). The tax benefits of home ownership far outweigh renting, too. With good housing prices in many great areas, this may indeed be the time to buy.

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So, you need to get rid of your house and you need to do it quick. Perhaps you have an adjustable rate loan that is about to skyrocket, or maybe you just got a job in another city. Whatever the reason, don’t panic. This may not seem like the best time to dump your house, but if you follow my advice, it’s possible.

Below are the five biggest mistakes struggling homeowners make when selling their home. I’ll also show you some foolproof home-selling tactics that will get you the highest sticker price for your house.

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Heading into 2008, the market just isn’t turning around as so many predicted. The industry, it seems, has been caught up in a game of “projecting,” to use a psycho-speak term. Meanwhile, this pesky subprime headache lingers on as we start to draw a clearer picture of how recklessly this shaky housing-market foundation was laid. It’s a hangover that will last well beyond New Year’s Day. In contrast to the billions in risky ARM loans that were advanced to questionable borrowers toward the end of the boom years, many credit-worthy buyers are now getting a different kind of arm — a straight-arm — when they seek out mortgages amidst a backdrop of spiraling foreclosures and plummeting prices.

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The debate over whether now is the right time to purchase a home or not continues to rage and many people are wondering how they can protect themselves during this difficult time. One of the biggest concerns in the current real estate debacle is whether lenders and real estate agents stood by while buyers took on mortgages they could not afford just a few years ago. Judging by the amount of foreclosures that continue to amass, it would certainly seem as though this might be the case.

As a result, many sellers are putting their homes on the markets without consulting an agent and even many home buyers are moving forward with the thought of purchasing their next home without assistance from an agent.

Even so, the home buying process can be quite complicated. The matter generally involves legalities that necessitate assistance from legal experts. In this case, it really can be helpful to consider working with a buyer’s agent if you are considering purchasing a home.

Unlike traditional agents that typically represent the seller, a buyer’s agent works to represent the buyer. This is a major step away from the way things are traditionally handled. With a traditional set-up, the agent represents the seller and as a result receives a portion of the sales price as a commission when the home sells. Obviously, it is therefore in their best interest to not only sell the home but to also get as much money as possible for the home. The more money the home sells for, the more money the agent will make through their commission.

If you are a seller, this type of arrangement works quite well. If you are a buyer; however, you may find that you are left out in the cold. A buyer’s agent can help to ensure that you receive protection through a professional representing your interests in the transaction.

Beyond the money, it is also important to consider that a buyer’s agent can help you to view home with a healthy dose of reality. When working with a seller’s agent you may not see the flaws that a home potentially possesses as the agent’s goal is to paint it in the best light possible in order to sell it. A buyer’s agent will help you to see the home in a more realistic fashion.

Before hiring a buyer’s agent; however, it is important to keep in mind that while a buyer’s agent can provide you with a lot of protection, there are certain tasks which are outside the scope of their responsibility. For example, while a buyer’s agent can help you in negotiating a fair price, they cannot guarantee you that they can get you a great bargain.

Furthermore, it is important to understand that in many cases a buyer’s agent is still paid with a commission from the sale price. As a result, this could mean that the agent still has a strong incentive for getting you to purchase a home. You can avoid this type of situation by negotiating the agent’s fee yourself. Instead of the agent receiving a sales commission, considering offering them a flat fee that you will pay them on your own.

It is also important to keep in mind that a buyer’s agent is not responsible for helping you to understand the responsibility you are taking on when you purchase a home. It is your job to understand your mortgage as well as the implications of that mortgage. It is also your responsibility to make sure that you purchase a home that you can afford and not one that will cause you to join the ranks of those who are experiencing foreclosure. It is entirely up to you to make sure that you are comfortable with your mortgage. Remember that just because you can buy a certain price home does not necessarily meant that you should just because the bank is willing to lend you the money. Ideally, avoid purchasing a home that is at the top of your price range. You may be able to live with it right now but that doesn’t mean you will be able to do so in a year or so if circumstances change. Ultimately, it is you and not the agent or the lender who will need to pay the bills each month.

Finally, understand that a buyer’s agent cannot promise you a great interest rate or even that you will be able to refinance later on in order to obtain a better rate. That decision is entirely up to your lender.

The alarms about the housing market have caused many people to hesitate in buying a home. In other cases; however, many others are snapping up what they consider to be excellent deals. It is not at all uncommon for many buyers to purchase homes at prices that are at least 10% below the asking price. As a result, many of the buyers closing on homes right now were not even considering the purchase of a home until they realized that if they did not take advantage of the current market they might not ever find something similar for the same price again.

Growing families are leading the pack among consumers who are buying homes despite the declining number of sales across the country. Thee combination of low prices and a wide selection have led many families to upgrade and purchase the larger homes they need to accommodate their expanding families.

When considering the purchase of a home in the current market, the key is to make sure that you search out those homes that are truly bargains. This is critical because despite the fact that the mortgage market appears to be in an ongoing decline across the nation, there are some still areas which have not felt the worse of the price declines yet.

In addition, it is important to look for homes that have features which will help it to maintain its value. Remember that just because the price is low on a home that does not mean that it is necessarily a bargain.

Buying a home right now can certainly provide many advantages; however, before you actually start shopping around it is a good idea to make sure that you have taken care of a few matters first to make sure that you can reap the maximum benefits. For example, if you are considering the purchase of a home and it is not your first home purchase, it is generally a good idea to wait to put a contract on a home until your existing home is in contract. Otherwise, you may get stuck with two mortgages and find yourself in a difficult situation.

In addition, make sure that you check on your credit and know where you stand before you apply for a mortgage loan. Mortgage money is still available; however, lenders have tightened the reigns considerably and are now reviewing loan applications far more closely than in the past. If you have delinquencies on your credit report, it is generally a good idea to take some time to improve your credit score as much as possible before you actually apply for a mortgage loan.

It is also important to make sure that you have saved a sufficient amount of money for your down payment. As a result of increased delinquencies and defaults, banks are now frequently requiring larger down payments as well as larger bank reserves. If you are a first-time home buyer consider checking into buyer’s programs that are specifically designed to assist with down payments and closing costs.

You should also check into the type of financing which you may qualify for before you actually begin shopping around for a home. In fact, it is a good idea to go ahead and get pre-qualified for your mortgage so you will know exactly how much house you can afford before you set your heart on a home only to discover that it is out of your price range. Along those same lines, if you obtained a pre-qualification a few months ago it is a good idea to make sure that not only does the program for which you pre-qualified still exist but that you still qualify for it.

Avoid making any major purchases while you are in the midst of the home buying process. Lenders are definitely more restrictive today than even six months ago. As a result, any changes in your credit score could affect your ability to qualify for a home loan. Even if you have already been approved for a loan and are in the middle of closing the contract, you could find the rug pulled out from under you if your credit changes during that time.

Now can be an excellent time to purchase a home if you plan to stay in the home for the next several years. By taking the time to make sure that you address your credit, pre-qualify for a loan and shop around judiciously, you could very well find a bargain on the housing market that would otherwise be unavailable.

The general rule for selling your house during the holidays has been: Don’t decorate too much because it could be a turnoff to buyers who don’t share your faith or can’t see past the decorations to appreciate the house’s attributes.

Some real estate agents might even advise you to take your house off the market over the holidays. And if you must keep it listed, then please don’t put a huge inflatable Santa on your front lawn.

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