There have been many predictions made about the real estate market for 2009. Most of the pundits who have weighed in believe that the market will remain unstable. It is expected that more persons will lose their homes and prices will continue to fall.
Foreclosures to Continue
There is every reason to believe that the number of foreclosures will continue to rise. Even if attempts to stimulate the economy are successful, the rate of foreclosure will not slow right away. Plus many homeowners are still losing jobs in record numbers; often creating an inability to cover mortgage loans.
It is expected, however, that as the year progresses there will be a fall in the number of houses on the market. Even so, the general consensus is that both home prices and the number of homes sold will continue their downward spiral throughout 2009.
Short Sales May Increase
To save their credit rating, more homeowners may opt for short sales instead of waiting for the foreclosure hammer to drop. Some Minnesota real estate professionals predict that short sales will increase in 2009. This will be a result of lenders trying to cut their losses early and homeowners minimizing damage to their credit ratings.
Rental Rates Will Increase
With more people losing their homes, the demand for rental units will push rental rates up. This does not mean fewer houses will be on the rental market. Rather, it's simply a matter of supply and demand as the availability of rental units won't be enough to meet demand. All of this will contribute to rising rental costs.
In what may seem like a contradiction based on the current state of the real estate market, mortgage rates are also expected to rise. This is a result of rates being influenced by "mortgage bonds and mortgage-backed securities." In fact, it wouldn't be surprising to see 2009 end with mortgage rates reaching around 7 to 8 percent.
Increase in Real Estate Transactions Online
Some industry experts believe that homeowners will bypass agents and instead try to sell online by themselves. This will be in an effort to get the best returns in a market where home values are still falling. Bypassing agents and completing transactions online may save homeowners in some cases, but may also put them at grave risk of making monumental mistakes in their sales.
Other Predictions
In some areas, there is the belief that home prices will not fall much more than they have. One haven of hope is that the stimulus plan will work and more homes will be saved. If the supply homes for sale decreases, prices should hold stable.
President Obama's economic stimulus package and how it will impact the housing market is up to debate. There have been two main factions here. One group believes it will make a difference and there are those who feel it's unfair to some homeowners. The Obama administration has tried to allay fears over the plan for the housing market. They claim that the plan will not be rewarding irresponsible homeowners.
It is also expected that fewer banks and other lending agencies will be going for loan modification. This may be true as lenders try to mitigate their losses and go instead for foreclosures. They are, after all, in existence to earn a profit.
It's Buyer's Market
For those in the market for a home, it's a buyer's market. With so many homes on the market, prices are hitting unbelievable lows in many areas. First time home buyers who can qualify for a loan are finding it easier to find homes to purchase in areas where they couldn't a few years ago. Some homes may now be purchased for much less than they were worth two years ago.
Despite all, there is hope that the industry will begin to rebound by the end of the year. Not everyone is so optimistic for the short term. Many industry analysts do not expect to see any major improvements until at least another five to ten years. But as Warren Buffet points out, "Business is always clearer in the rear-view mirror than it is through the windshield."
Author Resource:-
Kevin Curtis is a licensed agent with RE/MAX Advantage Plus and The Minnesota Real Estate Team. The #1 Re/Max team in MN for 2006 – 2009. Search MN MLS listings and get ongoing insights into the Minnesota Real Estate market at MinnesotaPropertiesOnline.com. You can follow Kevin Curtis on Twitter
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