Storm clouds are gathering over the nation’s battered housing market. Depending on whom you ask, the forecast calls for either thunderstorms or gale force hurricane winds. Fueling the latest concerns is a deluge of discouraging data in the housing sector.

Home prices and sales plunge
Sales of existing single-family homes declined in 40 states and in half of the nation’s biggest metropolitan areas in the last three months of 2006, according to the National Association of Realtors. The biggest declines were in Florida-Sarasota-Bradenton (down 18 percent), Palm Bay-Melbourne (17 percent) and Cape Coral-Fort Myers (12 percent).

At the same time, Nevada sales plunged 36 percent, while Florida posted a decline of 31 percent. Sales fell by more than 20 percent in Arizona, Virginia, California, Maryland and the District of Columbia.

2.1 million vacant homes await buyers
In addition to weaker sales and declining prices, a record number of homes are sitting vacant awaiting buyers. An estimated 2.1 million empty houses were listed for sale during October, November and December, according to the Census Bureau. That suggests that prices may have to fall further for sales to pick up and the overall housing market to recover.

Housing starts tumble sharply
New residential construction fell sharply in January, plunging 14.3 percent to the lowest level in nearly a decade as the housing industry continued to struggle with a severe slowdown. The decline in the construction of new homes and apartments pushed activity to the slowest pace since 1997, according to the Commerce Department.

Regionally, housing construction tumbled 29 percent in the West, 15 percent in the Midwest and 12 percent in the South. Construction starts were up only in the Northeast, which saw a gain of 9 percent. For real estate investors and home buyers, weakness in January construction means that builders will slash prices and offer incentives to motivate buyers into writing offers.

Foreclosures surge upward
The biggest news in residential real estate, however, seems to be foreclosures. The 130,511 new foreclosure filings last month were up 25 percent from 2006, according to RealtyTrac. The time has never been better for aspiring real estate investors, home buyers and real estate agents to successfully purchase foreclosure properties.

Today, the real estate industry is saturated with overpriced, over-financed properties. Add sagging sales, plunging prices, a glut of vacant homes awaiting fickle buyers and havoc in the housing sector begins.

But in chaos there is opportunity — and the real estate industry is no exception. In current conditions, people with the skill, capital and vision can make great profits. For RealtyTrac members, the existence of these opportunities is no secret. They know that a growing number of bargain foreclosures are now available.