Dark cloud, silver lining

For five years dire press reports have told of people losing their homes-but for three families and many more, falling prices signal buying opportunities.

Crandon Kopriva has lived most of his 30 years in a tall farm house situated on seven acres in the rural town of Windsor, Calif. His parents bought the land in 1979. Then, with the remainder of their savings, they found an old, dilapidated house and had it transported 20 miles up Highway 101 to the plot. Little by little, they refurbished the home while also planting fruit orchards, building two barns, and starting a mini-farm. It was a dream realized for them-one they hoped Crandon and his three siblings would also uniquely experience.

So when Kopriva finished college in 2005, his dad offered his old room back rent-free on the condition that he start saving for a house. Kopriva, who works for the California Highway Patrol, began diligently depositing a portion of every paycheck into the savings account he opened with his parents when he was just 12.

As home prices peaked in the mid-2000s, Kopriva doubted he would ever be able to buy a house near his family in northern Sonoma County, now prime real estate with its renowned wineries and picturesque hills lined with grapevines.

But in just a few years, Kopriva's prospects drastically changed. Housing prices everywhere plummeted as overburdened homeowners began defaulting on their mortgages, causing the nation's deepest recession since the 1930s. Daren Blomquist, vice president of Irvine, Calif.--based RealtyTrac, estimates that 4.2 million people have had their homes foreclosed since 2007. Even now, thousands of families across America are still losing their homes, or watching their values drop as foreclosures continue to flood the market.

For Kopriva and other first-time homebuyers though, the housing collapse has opened up historically low home prices and low interest rates. So far, home prices have dropped 33 percent since their peak in 2006. Many new buyers are also taking cues from family members, friends, and neighbors, who have learned painful lessons from losing their homes: Many are making short-term sacrifices and doing the math before jumping into the long-term investment of home ownership.

"For a lot of people it's been pretty hard, but for someone like me, it was pretty beneficial," Kopriva, 30, said. After six years of saving, last year he bought a Windsor, Calif., home with his wife Angela just months before their September wedding. Family members on both sides helped the Koprivas renovate the former foreclosure, including repainting the dark-hued walls with cheery yellows and blues.

Like the Koprivas, first-time homebuyers can still take advantage of the market's bargain prices-at least for now. Housing prices are expected to fall at least a few more percentage points nationwide this year as a backlog of more than 1 million homes could sell out of foreclosure, RealtyTrac's Blomquist says. An estimated 11 million Americans owe more on their homes than they are worth. But the market's recent signs of life-foreclosure filings fell 17 percent in the first quarter of 2012 to their lowest levels in nearly five years-have Blomquist predicting home prices will bottom out this year.

Newlyweds Jason and Kim Puuri of Haslett, Mich., have kept a close eye on housing prices the past few years. Two years ago, they talked it over with their parents and Jason's brothers-both "underwater" in their mortgages-and decided this was their window of opportunity.

Fresh off their honeymoon to Mexico, they moved into Jason's parent's basement, converting it into a "mini-apartment." They saved for over a year, hoping that housing prices would drop still more. At the time, four other couples they knew were doing the same thing. "As much as I love Jason's parents, it was hard getting married and moving right in with them," says Kim, 22. "Our motivating factor was the falling housing prices."

Now the Puuris are glad they waited. They recently bought a bank-owned home for half the cost of its appraisal amount, putting 20 percent down. They've decided to make triple payments each month, meaning they make do with hand-me-down furniture and some empty rooms. But within reach is home ownership: "Our goal is to pay off our loan in three years, so that no matter what happens we own our house," Kim says.

Adam and Deena Minter in Dallas also wanted to buy a home-but two years ago they faced uncertainty as the law firm where Adam works as a paralegal struggled to stay open. Watching home prices and interest rates drop was particularly hard for Deena: "I hate to pass up a good sale. I've just wanted to jump on it." But instead of jumping the Minters cut back, moving from a rental house to a two-bedroom apartment.

They also started home businesses: Adam, 31, runs a loose-leaf tea business in a bedroom closet they turned into an office. Deena has a sewing business she operates on the dining room table where they also homeschool their two young daughters. Two years later, Adam still holds his job at the law firm. With their acquired savings-combined with money they withdrew from Adam's IRA account-the couple is moving next month into a "way underpriced" three-bedroom home in an East Dallas neighborhood Deena has been eying for years.

Patience for the Minters and the Puuris proved beneficial.

For Angela Kopriva, 31, who admits that starting out and buying a house once "seemed daunting," she now says she is thankful for favorable timing and the "values of hard work and saving" that parents instilled in her husband and herself: "We feel very blessed."

-Mary Jackson is a writer living in Santa Rosa, Calif.

Rent or buy?

Collin Bills planned to rent while completing five years of medical residency training at a Memphis, Tenn., orthopedic clinic. Working 80-plus hours a week, he says all he needs is a place to study, sleep "six hours if I'm lucky," and plop on the couch for a football game or reruns of The Office.

Last year, Bills' roommate moved away, and he started considering other options. Like many, he's seen the cost of renting rise-up 2.4 percent in January over the previous year-as foreclosures turn previous homeowners into renters, and some who rent are wary of taking on a mortgage in a weak economy.

But Bills realized he could save $400 a month if he bought a home. His dad, a physician in Tullahoma, Tenn., agreed to loan him the down payment to buy a small, well-kept home built in the 1960s in one of Memphis' best school districts. "I would rather not take the risk. I would rather be free of the obligation of having to sell the house in five years," Bills, 27, said-but after doing the math, "it makes sense."

By April, Bills had moved into the house, and unexpectedly is discovering joy in home ownership: "When you believe that something is partly yours, that you get to take care of it, you get enjoyment and satisfaction out of that."

Bills says without his dad's help, he never would have qualified for a home loan: "I've got a lot of debt from medical school." Since the recession, lenders have learned to be more cautious. Banks have tightened their qualifications for homebuyers, and most now hold tougher requirements for homebuyers, including high credit scores, proof of a stable income, and more cash for down payments. But a downturned homebuyers' market can work in favor of renters whose monthly payments are on the rise. -Mary Jackson