1. Short sales and REOs will continue to dominate the national real estate markets. (Expect Short Sales to be seen as ‘the solution’ for the foreclosure crisis)
2. In some markets…in the lower end price ranges…the home values have hit bottom. There will continue to be significant depreciation in homes that cost over the FHA lending limits.
3. THE FIRST HALF of this year will be stronger vs the second…why?:
4. The ‘Home Buying Stimulus’ expires in April.
5. The government is going to stop buying mortgage backed securities (MBS). This WILL result in rates increasing.
6. The FHA has made it clear that they will RAISE lending standards. (This has already started).
7. 25% of all Americans with mortgages are now upside down in their home. In many areas of Florida that number is significantly higher. There will be more homeowners deciding to rid themselves of their own ‘toxic assets’.
8. The banks are now releasing their “so-called Shadow Inventory”. Elizabeth Warren (Chair of the Congressional Oversight Committee) thinks there are as many as 15,000,000 homes that could become foreclosures…and REOs.
For these reasons we are expecting there to be a double dip in housing. What this means is that for the first half of 2010 there will appear to be a housing recovery…to be followed by more home value depreciation. Expect the most significant depreciation with homes that are above the FHA lending limits.
