What Will The 2010 Real Estate Market Look Like?
January 13th, 2010 categories: Buyer Resource
With the start of 2010, we have heard a recurring question; What will the 2010 Real Estate market look like?
I have done a lot of reading and research, both good and bad. There are a lot of bulls who expect great things from 2010, and there are also a lot of bears who are predicting some not so good news for 2010. I wanted to share some of the factors that will shape our year.
Sonoma County Real Estate 2010
The Homebuyer Tax Credit will go away at the end of April, 2010. It actually goes away at the end of June 2010, but the contracts must be dated for the end of April, and then you will have 2 months to close to be eligible for the tax credit. Again, First Time Homebuyers are eligible for an up to $8,000 tax credit, and current homebuyers purchasing a qualifying second home and eligible for an up to $6,500 tax credit. Will the tax credit be once again extended before it’s expiration? We are not sure, and will say the U.S. Government cannot support the housing market forever, so let’s not plan on it.
Mortgage Interest Rates are certainly at historically low levels. We cannot definitively say when the rates will rise, but it is clear they will eventually rise given their current low levels. Will 2010 be the year we see mortgage interest rates rise? We are not sure. As housing prices improve, and the stock market rallies, this will put upward pressure on mortgage interest rates.
Housing Inventory will have a large impact on our 2010 Real Estate outlook. Housing inventory will be largely affected by short sales and foreclosures. Many think that the unemployment rate will continue to drive further short sales and foreclosures, as the people who are unemployed or underemployed, will not likely be able to meet their monthly mortgage obligations.
The Loan Modification program the government started is beginning to show some results. These loan modifications allow for those who have loans they can no longer afford get help through a modified mortgage that is now affordable for their new financial circumstances. These modifications help to keep people in their homes, keep Real Estate inventories at a more normal level, and reduce the numbers of foreclosures that tend to drive Real Estate values lower.
In addition to the factors listed above, local markets will likely experience unique factors that will also shape their local Real Estate markets and Real Estate values.
With all of the above factors having such large potential impacts, and admittedly being somewhat unpredictable in terms of timing and or scale, it is tough to give an accurate prediction for 2010 Real Estate prices. Perhaps this is why the “experts” cannot seem to agree on what 2010 will look like.
We hope this article gives a little insight into some of the factors that will shape our 2010.
If you have any questions about the 2010 Real Estate outlook, or Sonoma County Real Estate, please do not hesitate to contact us.
