What will 2010 Bring

2010 is here but will it bring changes to the real estate world? Changes are coming for sure... but will they be changes for the positive? Values appear to have stabilized after 37 months of decline and inventory has reached a low point over that same span. There is pent up demand to be sure but so many underlying factors will make for another murky year. Many homeowners have seen their home values decline 30-50% over the past few years and simply are unable to sell their homes to move up. Many homeowners are doing "strategic short sales" whereby they decide the negative equity in their homes will take longer to recover than the hit to their credit scores by a short sale or foreclosure so they simply walk away further eroding values. The credit crisis has created some of the most difficult lending standards in decades which in turn is preventing many would be buyers from making a purchase. The outlook is for lending guidelines to get even tighter throughout the year which will only compound the problem. The big mystery in 2010 is the so called "shadow inventory" that many predict will be hitting the market. Shadow inventory is the build up of foreclosed properties that are currently owned by banks and investors that has not yet hit the market. Many experts put the number of homes in shadow inventory at 2-3 million and should the banks decide to let loose on all these properties at once... values you begin another tumble. I think the shadow inventory will continue to stay in the shadows and slowly trickle to the market as congress continues to pressure Wall Street to work on loan modifications and short sales, and the banks feel the pressure to turn qrtly profits. There are many positive signs to look for in the market along with many challenges. No crystal ball can provide the answers and only time will tell what 2010 will bring... one fact does ring true now more than ever... if you are ready, willing, and able to buy property in 2010... now is a great time to do so! Interest rates are at historic lows, values are the lowest they have been in years, and first-time and move-up buyer tax credits are available.