Citigroup, the largest bank in the United States, announced today that earnings fell about 60% from last year at this time due largely to losses sparked by the U.S. subprime mortgage mess. Citigroup will write down loans estimated at $1.3 billion on subprime related assets.

Exactly what does this mean? For the consumer, not great news. Subprime lending is being blamed for the unprecedented surge in foreclosure activity around the U.S., partially responsible for the drop in consumer confidence. Countless media commentary is advising average homeowners not to buy a new home for at least a year. If you have your house on the market, expect to cut your asking price significantly if you want to sell your home.

Many residential real estate investors are in a “holding” state as well, they are waiting to see how low prices will fall. Small commercial real estate investors appear to be unaffected and some are even flourishing. Big investment companies that made many deals in the last few years are taking more time making deals and choosing deals very carefully.

This has opened the door for small investors who want to buy apartment houses, shopping malls and office buildings. Smaller investors are appealing more and more to sellers due to their ability to close agreements at a faster pace and with cash. Smaller investors also are more open to purchasing properties that require some rehab, which larger investment conglomerates (like REITs) are not willing to buy.

Larger investment groups will probably get back in the game soon, maybe in the next few months. Now is a great time to find some great deals in your area. There are also many commercial properties in the distressed property market. You can check out the listings in your county by going to Foreclosure.com