Americans have learned a lot about the real estate business and about the mortgage industry in this recession. In some cases, it is more than they care to know. Now, some homeowners know their loans were the result of predatory lending practices that have nearly destroyed our financial institutions.

Post recession credit markets, real estate markets and mortgage practices have changed. The American homeowner proceeds with caution and for the first time in a very long time, Americans are beginning to save money.

Before the ship is righted, there will be more suffering. But when the Oracle of Omaha, Warren Buffett, speaks, people listen. Buffett believes there are too many homes on the market. Supply outweighs the demand. This drives prices down and sends a buy signal to able investors.

The two factors driving this market are the first time homebuyers who are anxious to beat the November 30th cutoff date and the expanding floor of distressed properties. These two components are driving the market.

The 2009 first time homebuyer tax credit has created more than 1 million transactions. Despite this activity, 35 percent of existing home sales are distressed, either foreclosed or short sales.

There is no disputing the difficulty of the current market. Basically homeowners and lenders are trying to work through a treacherous predicament that is wrought with disappointment and disillusionment. One symptom that has become increasingly evident is that more distressed sales will continue to occur. Between July and September 2009, more than 1 million homes were engaged in the foreclosure process. This trend will continue through 2010 and into 2011.

In areas like Nevada, once a booming real estate industry, one of every 23 households was in foreclosure. Real estate price have plunged 50-60% below market highs. Investors who can afford to buy low and hold are well positioned to capitalize.