2010 Real Estate Predictions – No Crystal BallJanuary 6, 2010
Where will housing be this coming year? That’s a great question and I have some predictions. Some of them are painful and some of them just might come true – let’s see what you think.
1. Home prices – Home prices will continue to fall in the coming year. This is almost a certainty. With a backlog of foreclosures and short sales waiting on the market, we will see a decrease in pricing. However, if you discount the unrealistic pricing in the 2003-2005 years, homes are actually selling at fair market value – it’s just not the value you thought or anticipated. So many people borrowed against their inflated equity which resulted in their homes being worth less than their mortgages. People who didn’t over-borrow will be just fine.
2. Foreclosures – watch for this debacle to continue and grow before it starts to wind down by the end of the year. I know people still living in homes where they have not made mortgage payments for over a year. The banks are taking their “time” working these homes through the system – if they foreclosed on all the outstanding bad loans – it would send shock waves through our economy and Wall Street. You will see high-end foreclosures with homes over $700,000 taking a big hit. Builders are especially affected and many will not be able to stay in business.
3. Banks – Lending institutions now basically control everything. While they had a stronghold on real estate in the past – they dictate price in the future. Many homes today are under-appraised to ensure that the bank is mortgaging a home that is below fair market value. It’s a new tactic. In addition, banks borrowed a LOT of money from the federal government (taxpayers) to stabilize their banks BUT THEY DID NOT GIVE LOANS TO THE PUBLIC AND DID NOT RENEGOTIATE TERMS OF OUTSTANDING DEBT NOR DID THEY AGREE TO MANY SHORT SALES. It is still a startling statistic that only 1 in 10 short sales actually occur. Banks are not cooperating and as a further insult – they gave the money they borrowed (after strengthening their banks through investments) back to the federal government to avoid federal oversight. In so doing, they guaranteed themselves large bonuses at the end of the year. I am constantly shocked that our elected officials haven’t been outraged at this practice. Banks= greed.
4. Who’s Buying? – First time homebuyers and move up buyers represent the strongest potential for purchase in the coming year. The thing to consider is that they will stay in the FHA price ranges which mean if your home is under $360,000, you have a strong chance of selling your home. If your home is under $200,000 – you may have an even better chance. If you are a buyer – BUY A HOME NOW – the prices won’t be this low again after the year ends. 2010 is THE TIME TO BUY if you are a buyer and are credit-worthy.
5. Variables. I have often said – as the housing industry goes – so goes the economy. This is still true. These past two years are proof that the housing market affects every facet of our economy from families eating at restaurants to lumber sales. There will be homes selling and there is increased buyer traffic. 2010 will most certainly see an upswing in purchasing power for buyers and it will be a good year for real estate. So many things hinge on banks giving out home loans and creation of new jobs. If the job market improves then we are REALLY going to see a strengthening of the sales in Florida and in the United States. Job uncertainty creates fear and fear is the worst thing that can happen when it is time to sell a home.
6. What will sell – Home buyers still want a home that requires little to no repair or renovation. The home that reflects tender love and care is going to fly off the market. So many homes today are in disrepair and the foreclosure market is not always a bargain hunters dream when you mix in the cost for renovation. But the homeowner who maintains their home, shows it beautifully and has it staged will see eager buyers. Of course, the lower price points will be the most desirable. Smaller is becoming the new “hot” home.
Everyone would like to know how much longer? What will it take to turn our economy? What do I think about our government? These are all good questions and I would encourage you to be ACTIVE and take a strong interest in your elected officials in Congress. It really does make a difference. While health insurance is a good thing – it’s not THE MOST IMPORTANT thing in the lives of average citizens at this time. AMERICANS NEED JOBS and they need the jobs NOW. I believe that the average American understands this well – let’s hope our elected officials wake up in time to save our nation. I’m prepared to vote and campaign for anyone who understands this.
2010 is going to be a year of change and I think it will change for the better. I’ll know I’ll keep blogging about it.
Posted in Central Florida real estate, Home Buying, Home Purchase, Market Conditions, Orlando, real estate | Tagged 2010, 2010 Real Estate, Crystal Ball, Home Buyers, home sales, Jobs, Predictions, real estate, Real Estate Forecast |