The New Year will bring discounted values in real estate for average Mom and Pop home buyers and investors as the fallout from the worst housing crash since at least the Great Depression pulls prices down, and forces mortgage lenders to drop asking prices.
The inventory of delayed foreclosures and short sales will allow home buyers and purchasers of other properties to buy primary residences and investment properties like it’s a blue light special at K-Mart in 2010, according to the new Housing Predictor forecast.
The pent-up number of homes awaiting foreclosure, estimated at more than 2-million will provide a selection of property that hasn’t been seen in decades to the detriment of millions of homeowners, investors and bankers. The wealth of opportunities will also trigger a long lasting recessionary cycle in housing much worse than the U.S. Savings and Loan Crisis in the late 1980s that will take years to over-come as earlier forecast by Housing Predictor.
The worst affected housing markets are showing signs of improving from their downturns with the federal government’s first time home buyers tax credit. The Obama administration’s housing rescue plan has also made other inroads to aid the marketplace. But at best the program is so beleaguered with bureaucratic red-tape that only a small percentage of homeowners at the risk of foreclosure are anticipated to get the help they need to stay in their homes. The Treasury Department says that under its present modification program only 12% of all homeowners at risk of losing homes fit the program to receive assistance.
Bankers will be forced to work with homeowners in time by Congress, but like a locomotive leaving the train station the housing crisis has exhausted its time table to bring bring any meaningful assistance to most of those caught in its tracks.
Nearly every housing market in the country has suffered from the un-winding of the housing crisis with few exceptions. The six states that have the worst foreclosure levels, including California, Nevada, Florida and Michigan may be on the mend, if for no other reason other than there markets have seen prices drop so much that consumers feel they can’t drop much further.
Record high foreclosures, which could top 25-million, will provide the inventory that investors have been looking for and many especially hard hit markets are seeing an increase in real estate sale inquiries with pent up buyer demand. Foreclosures and re-sale properties negotiated for the best price possible will supply a growing inventory.
Bankers are projected to record near record losses, but more anticipated government bail-outs will aid the bankers that harvest the nation’s mortgage Gold. The Federal Reserve is projected to keep interest rates low through at least most of 2010 in an attempt to get the U.S. economy on a path to recovery and take the country out of the recession.