While some say the housing market has "hit bottom", or it is "in recovery" or it is "stabalizing" to that I say..."READ THE REPORTS!"
Why do I believe it is no better than it was a year ago?
→ Foreclosures are still very high and rising...FORECLOSURES HAVE NOT REACHED THEIR PEAK...We are 12-24 months from that.
→ Unemployment is still high...much higher than what is being reported
→ Home sales are flat to shrinking in many areas
→ Delinquencies are very high and rising...even for those who have Prime loans
→ More homeowners with good credit and good jobs are walking away from their homes because they are so far upside down, they will never recover
Hmmm...2010 Better Than 2009?
So, will 2010 be better than 2009? I have no crystal ball, but let's look at some indicators...some we see above.
- First, see everything above and you tell me
- Rising Interest Rates: While the FED will seek to hold down rates, many are predicting a rise in long-term interest rates. If that happens, this will put greater pressure on the housing market.
- The End Of Government Housing Subsidies/Tax Credits: How long will the government continue the tax credit? Who knows. They will certainly have pressure to both cease and continue. At some point it will end. Low interest rates and tax credits do not create a long-term stable housing environment...PERIOD!
- More Americans have realized that "home ownership" is not all that it is cracked up to be. Many will settle with renting and living with relatives.
- High priced homes will have more pressure to maintain their value. As they decline, so will how homes under them. Think about it, what happens to the $300,000 homes when the $750,000 homes start selling for $400,000 or less? If you live in an area with a lot of high priced homes (say $200,000 above the median price), you better keep your eye out and be careful about buying. When they start dropping, you better sell yours quick.
3 reasons home prices are heading lower
"But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up. Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%"
- Residential Property Values: The Numbers Still Say 30% Left to Fall
- Fannie Mae: Delinquencies Increase Sharply in October
- Renting A Home A Better Deal Than Buying In Much Of U.S.
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