Fast-changing conditions on the ground have many real estate professionals scratching their heads in frustration, seeking a way to work modern day miracles - reaching their financial goals while meeting the needs of their clients - in one of the most challenging real estate markets in decades.

In our first article we shed light on current trends in mortgage foreclosures. When the market first went south, the initial victims of the housing crisis were homeowners with sub-prime mortgages. As the dust from the early days of the crisis settled, more homeowners were caught in the snare of foreclosure. We'll explain who the latest victims of the foreclosure crisis are and the reasons that the number of foreclosures is expected to increase again this year.

The expiration of the Federal Housing Tax Credit was expected to cause residential home sales to drop precipitously, but the speed with which sales declined has shocked many. In our second article, we delve into some of the reasons that lower home sales figures could be the norm for the foreseeable future.

The federal government has changed existing rules that - until now - allowed FHA loans (new and refinance) to be approved for condo units in complexes lacking FHA approval. The new rules have stopped this practice, which compounds the problem of sluggish condo sales. In our third article, we'll offer common-sense advice for Homeowners Associations and management companies that can dramatically increase the pool of available buyers.

The Changing Face of Foreclosure

When the real estate market spiraled sharply downward a couple of years ago, government and industry experts had an easy villain: subprime lenders and others who made many loans that, in retrospect, shouldn't have been made in the first place. Today, however, the situation has changed. Now, the majority of residential foreclosures are a result of a lousy economy, massive unemployment and the inability that many borrowers have to refinance their loans.

Unemployment, the primary cause of residential foreclosures this year, is expected to cause the number of foreclosures to rise to more than 1 million - 100,000 more than in 2009.

Many of these homeowners were good credit risks, paid their mortgages on time, and were steadily making progress on their loans. However, unexpected job losses contributed to a persistent inability to make mortgage payments as a result of rapidly falling incomes.

Unemployment benefits, which are often just a fraction of the income homeowners rely upon to meet their financial obligations, are usually inadequate to allow people to make their mortgage payments and - coupled with little or no savings - contribute heavily to the sharply increased foreclosure rate.

Experts expect the national real estate picture to get worse before it gets better. With the influx of approximately 1,000,000 foreclosures this year flooding the already saturated residential real estate market, home prices are expected to fall - bad news for an industry already battered by problems on multiple fronts.

Federal Housing Tax Credit Expires; Sales Plummet

With the expiration of the Federal Housing Tax Credit, sales of residential real estate have fallen off a cliff: The Pending Home Sales Index dropped by 30% in May. While expected, this decline effectively ends a three-month trend of rising sales as home buyers tried to beat the clock and make purchases before the credit expired.

While real estate professionals are ready for sales volume to pick back up, two major obstacles currently stand in the way of a real estate recovery: high unemployment and a lack of available financing.

An estimated 495,000 private sector jobs have been created so far this year. Analysts at the National Association of Realtors (NAR) are hopeful that an additional 1 million jobs will be created by the end of the year, with another 2 million jobs coming in 2011.

Federal officials confirm what most people already know: real estate loans have become increasingly difficult to obtain, even for those homebuyers with pristine credit. Because of the inability of most home buyers to obtain conventional financing, borrowers are increasingly relying upon the FHA to provide lenders with guarantees that mortgages will be paid in the event of borrower defaults.

While nobody can look into a crystal ball and know with certainty what will happen in the residential real estate market, one thing is a certainty: the next several years will remain challenging for real estate professionals.

New opportunities to prosper will present themselves and real estate professionals that are ready to seize upon these opportunities by adapting to trends and meeting the needs of their clients will succeed - regardless of market conditions.

Condo Spot Approvals Eliminated; Approval Now Required for Entire Complex

Until recently, anyone wishing to obtain an FHA loan for a condominium purchase or refinance was able to see "spot approval" from the federal housing agency. New rules that went into effect in February now require that condominium developments seek FHA approval before any FHA guaranteed loans or refinance loans can be approved.

While Homeowners Associations and management companies aren't sold on the idea, one thing is certain: embracing the new rules and seeking FHA development approval makes good business sense. Since 2006, mortgages insured by FHA have grown from just 1.7% of the residential housing market to nearly half of all new loans.

The conventional mortgage market has dried up. Borrowers are increasingly turning to FHA to provide lender guarantees that will allow them to receive the financing that they need for their purchases.

With FHA loan limits being increased to $793,750, many condo units are now a good fit for the federal program.

FHA approval for condominium developments promises another tangible benefit: a dramatically larger pool of available buyers. Potential buyers unable to obtain conventional financing due to minor credit problems or having an inadequate down payment will take a pass on any property that isn't approved for FHA purchase. This means that the number of potential buyers for unapproved developments will be reduced, which increases the likelihood that these properties will remain on the market for an extended period of time.

Persistently high unemployment and tight credit standards have already reduced the number of available buyers for condos. Real estate professionals that adapt to these changes and seek FHA approval for condominium developments can offer potential buyers the opportunity to take advantage of favorable terms offered through the generosity of Uncle Sam.