I hope everybody had a nice holiday. I can’t believe that the first decade of the 2000s is already coming to a close. We definitely had some real estate “ups,” but more recently, some mega “downs.” I figured this would be the perfect week to talk about some of the predictions for real estate for next year, as well as what some experts predict.
CNBC is predicting a lot more foreclosures than what was previously expected. They think that homeowners will continue to struggle with mortgage payments and the banks will end up owning the property. While that can cause a delay in getting approval for a buyer to come in and buy the property, hopefully Obama’s new short sale reform proposal should give us timely responses.
CNBC also doesn’t think there will be any super low interest rates for borrowers to finance a mortgage. They’re not thinking they’ll be through the roof, either. Most likely, they say, they’ll level off around 6%. This is still reasonably low, considering that in the ’80s the rates were around 20% or higher.
About.com is predicting that home prices will stabilize. They think that prices will remain steady, with a few cities having some appreciation and some more depreciation, but that prices and the market shouldn’t completely bottom out.
Similar to CNBC, they think that mortgage refinancing will take a big dip in 2010. With interest rates on the rise and people losing equity in their homes, it will be hard to make a refinance worthwhile to many homeowners. However, if you are on an ARM, interest-only loan, or have a rate higher than 6.5%, it’s definitely worth talking to a broker about your refinancing options, especially if your ARM is coming due or you’re not paying any principal on a monthly basis.
Since lenders are requiring better credit scores and are very particular about financing options, it is more likely that move-up buyers will indeed move up. A lot will stay put when they realize it will be hard to come up with a significant down payment on a new home. This could clear the inventory out a little, if it’s not bombarded with more and more short sales and foreclosures.
What do you see happening in 2010? Do you think housing prices will slowly work their way up? Do you expect Obama’s short sale proposal to come into effect? I’d love to hear your thoughts. And if you are thinking about buying, don’t forget that the $8,000 tax credit expires April 30th. So the first quarter of the year is your best chance to buy. Please leave me a comment or visit me online.
Have a very safe and Happy New Year. See you in 2010!!