Top 10 Predications for the Real Estate Market

10. Tax Breaks for Home Selling will be revised

·         Elected officials in Washington will consider eliminating the tax exclusion on home selling profits and the tax break for home selling may soon disappear. The law exempting $500,000 for married couple and $250,000 for the single person from capital gains tax may soon disappear. 

9. Rental rates will increase

·         As more home owners are forced into short sales or foreclosures they will be subject to rate increase in the rental market.

8. Mortgage Rates are going to Rise?

·         Mortgage rates are influenced by mortgage bonds and mortgage-backed securities not the fed rate cuts (as everyone thinks) interest rates will remain low until employment rises.

7. Banks Will Pursue Foreclosure Options Over Loan modification

·         Banks will find it easier and less expensive to foreclosure than to do a loan modification. Highly trained personal is not need for a short sale or foreclosure and loan modifications call upon the bank to hire experience and higher paying employees.

6. Sellers will Shun Loan Modification Programs in Favor of Short Sales

·         Up side down home owners will opt out rather than face the cumbersome and often riddled with conflicting demands with their same lending intuition to do a loan modification..

5. Real Estate Competition will drastically shrink

·         The smaller real estate companies, failing banks and struggling title companies will merge into larger companies.

4. Buyers will once again compete in multiple offers on homes.

·         Due to short sales and foreclosures buyers will be competing over those attractive listings, causing frustration and confusion among buyers. This is where cash will win every time over financing.

3. Banks will Rent rather than Sell

·         Instead of taking a loss, banks will rent out REOs hoping to sell when the market turns, although most state charters prohibit banks from renting out bank-owned homes, banks are going to find a way to do it

2. Housing Inventory Will Fall More

·         As does employment go so shall the real estate market, should employment improve so shall property values.

1. Little Appreciation for the Housing Market

·         With so many foreclosures home values will remain low.

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