Due to the growing numbers of real estate foreclosures and bank owned real estate inventory, we are in a buyers market. This is when real estate is considered easier to buy at a good price than to sell for a profit. Even in a buyers market real estate is one of the best initial investments to be included as part of your plan to create wealth or achieve financial independence.Creative financing features like “lease with option to buy” make it possible for those with a poor credit score to invest in real estate along with those who are credit worthy. When new home sales plummet and when professionals are laid off look for real estate foreclosures to flood the market. The principals of supply and demand determine pricing real estate is no exception. There is a tremendous supply of housing that demand has not caught up with as of yet.New home sales are at their lowest levels in almost a decade. Many real estate buyers who did not truly qualify for a mortgage two years ago are now in foreclosure. Certain economic conditions like cheap labor in global economy have resulted in a loss of middle class jobs in the US. This has affected Mr. & Mrs. Homebuyer with lower wages and corporate downsizing.Depending on the type of mortgage secured by homeowners an adjustable rate mortgage for example the mortgage payments could almost double. Homeowners with higher than expected mortgage payments have found themselves unable to pay the lender and their homes have gone into foreclosure.A high number of real estate foreclosures create a credit crunch. When it’s harder to get credit, fewer mortgages are created fewer homes are sold. Even with the current problems in the housing market, real estate remains the best initial investment. With home sales slowing the major consideration is that consumers will stop buying things other than homes, like cars and appliances. Retail stocks would be the sector to watch in forecasting economic health.Unemployment figures affect the market value and health in the real estate industry. When factory jobs are replaced by service jobs that pay less than half of the salary of the factory jobs, the real estate industry is adversely affected. People are not able to qualify for real estate at market value because their jobs are paying less than five years ago.Look for real estate prices to fluctuate with corporate downsizing that causes mid management and professionals to loose their jobs. The health and profitability of the real estate market depends on the total economy, which responds to supply and demand, cause and effect.Even when mortgage companies are closing their doors, real estate is still the best initial investment and financial plan to create personal wealth and financial independence. Smaller multi unit dwellings that have been returned to the lender represent excellent investment opportunities. Smaller homes for first time real estate buyers can turn into income property producing passive income in just a few years. This scenario based on adding a rental unit onto the small starter home or even a second story that can be used to increase the market value of the property.”For Sale By Owner” when the owner will also function as the mortgage lender is a way for would be real estate investors to get started. The key to successful real estate investing is being able to sell before the price drops and buy after the price drops. Being able to determine when the price of real estate will go down or appreciate in value will contribute to the success of any real estate investor.Take care of your credit, save your money and don’t invest money that you cannot afford to loose.It’s important to not fall behind in any mortgage payments and it’s also important to not have so much going on that you crash and burn because you the investor can’t make your mortgage payments. Protecting your credit, investments assets are still not enough to protect you against living beyond your means. Consult your business plan and keep an eye on your cash on hand in the event that you will have to hold onto real estate longer than first anticipated.