What year will be in real estate! I think I'm one of the last realtors! Over the past 18 months there has been an outflow of real estate agents from the business, and those who remain are really the ones you want to work with. This is a professional market, and now, more than ever, you need a great realtor who will help you with your real estate needs. But what awaits real estate in 2010?
Next year we can expect something like a rollercoaster ride for real estate in general. At the periphery, we have a lot of good and a lot of not very good, so how can you manage yourself and your home and investments as best you can? Or will 2010 be the year when you jump into the real estate market? Let's look at the good and the bad and discuss how about each market segment (buyers, sellers, investors, etc.).
First, the bad:
In 2010, there will be more of the same from the repurchase of banks and short sales. According to their latest statistics, according to NAR, about 25% of all transactions in America are now problematic. Obviously, everything is different here in San Diego, where this number looks like 100%, but in fact it is closer to about 2/3 of all sales, and it varies from area to area through the county. Due to the lack of cohesion and cooperation from banks, as well as from government regulation, it was quite difficult to obtain anything that was done with the bank in 2009. True, systems exist and are becoming even more sophisticated, and more and more people are hired to take on the workload in banks to get used to working with so many short sales, however this has been a work in progress for the last 3 years and will continue until 2010 year and on.
In fact, a record number of non-compliance notices (NODs) were recorded last month, and with changes in loans it becomes less and less similar (which means that banks are simply not very much) expecting there to be a consistent flow of more and more short sales and foreclosures. In addition, there are certain ALT-A loans (what people called the next wave of bad loans) when borrowers of these types of loans see that their loan is being revised to an inaccessible amount, which causes further pressure on defaults and foreclosures. Moreover, making a short sale, in my opinion, becomes an acceptable social construction. Short selling is now commonplace, not as stigmatized as it has been for the past few years; the same goes for foreclosure. A huge number of people got into a bad loan or a bad investment that no longer hesitates to keep at home.
The tendency now is to stop making payments and live in the property for as long as possible, and then dump the property and engage accordingly. Perception has shifted, and I predict a significant increase in short sales in 2010. I only hope that banks are ready for this. Moreover, the IRS has a tax exemption that you usually pay for any forgiven debt for your principal residence. This is one of the main reasons why people decided to make a short sale in the first place (among other benefits). This exemption will expire at the end of 2010, and this will be the reason for many homeowners who are just thinking of a short sale to get them to take action. You will want to consult a professional to get real answers when it comes to a short sale, and you can contact me if you need such help today.
Foreclosures, as well as short sales, will continue to make up most of the available stocks until 2010, and I don’t see them leaving any time soon. Expect this trend of massive sell-off (short sale and foreclosure) at the end of 2012 or in 2013.
As for the elite real estate market and the commercial real estate market; both of which struggled in 2009, they will continue to do so in 2010. I believe that the effect of the economic and market recession will become even more pronounced for both these market segments in 2011 and beyond. For high-end homes, perceptions change, people begin to live more in their own means. This recession has taught many lessons of excesses that have become commonplace over the past decade. In addition, due to changes in the credit guide, buyers, who usually can afford expensive credit, can no longer claim this. Moreover, most people in this price category are simply not ready to risk or have lost their money and funds for this. As a result, the lack of sales in high areas of San Diego reflects these trends. I see that people with money use better deals at lower prices, and everything above a million has not yet seen the bottom. To cover this, lending at this price was just beginning to turn; for most of this year, it was difficult to get financing for high-end homes, even with 50% advance payments! Specifically, I would not recommend entering the real estate market at any price of more than $ 1 million in 2010 if you do not find one of those wonderful deals everyone is talking about (but very few actually find). Ultimately, I think that there are too many shortcomings and risks here, and not enough rewards.
For commercial real estate, we still have to see the bottom. First, the economic downturn led to the fact that many businesses closed the store, which increases the number of vacancies and determines the money received by the owner of commercial real estate. It also causes property values to decline as commercial property is valued on the basis of the income it generates. In this regard, there will be a lull for most commercial properties until the economy begins to recover and jobs are created on a massive scale. Secondly, many property owners have refinanced their loans for commercial real estate over the past few years, and these loans will be called due, which is especially problematic for those properties that cost less than what is owed to the bank. Thus, we will see that more and more commercial real estate is being lost and sold through a short sale (which simply did not occur somewhere near the levels of residential real estate). I personally have not seen enough significant reductions in most commercial real estate values to name the bottom in 2010. This trend will continue over the next few years, as trends in commercial real estate tend to lag behind residential space. I believe that we see only the beginning of what is about to happen. However, I believe that there is an incentive in this regard. I am beginning to see a property with a large income, which has not previously been priced, but is now sold at prices where the owner can receive cash flow with a modest amount. I would follow this market segment.
It is important to note that the economy itself will also play an important role in the restoration of real estate at the local and national levels. We have seen real estate put us in this mess, and it will also be one of the first industries to lead us. Although we began to see many signs of improvement, we are not yet from the forest. Now we are talking about creating jobs. After the economic recovery, the creation of jobs will significantly improve and evaluate real estate.
Good:
2009 was the year when (mostly) the market reached a lower limit. For any average price property or below, we saw the lower part of the market reached in early spring of this year. Since then, we have been experiencing a shortage of inventory, which increased demand and caused price stability, and in some areas increased prices. What I can buy in Chula Vista, El Cajon or North Park today is more expensive than at the beginning of this year. Again, we see that the shift in perception and mentality of buying a home has changed. As a result, buyers are in the crowd. Repeated offers are a normal phenomenon and this is a difficult task for an active buyer because of competition in the market. In addition, interest rates are seriously phenomenal, and I would not expect them to be so low for that much longer.
All this money that is printed and the debt that the United States takes will have a serious effect on inflation. This increase in inflation will indeed lead to an increase in interest rates (the reason is that inflation leads to the fact that the dollar is worth less. The dollar suffered is just cause and effect). I'm sure the food will try to keep it as long as possible, but if you are in the market to buy a house, why not do it now? Prices are fresh from their bottom and with such indicators, one could look back in the future and say “why the devil did nothing when I had such an opportunity!”
To make things even sweeter, the government extended a home loan for the first time until mid-2010, and also included a raise loan for buyers to stimulate this other important aspect of the market. (For more information call me)
A separate note: throughout the year, people repeatedly turned to me for conversations about the shadow inventory of REO / Foreclosure / Repossessed houses that banks hold. These people talk about this because they are going to wait until the banks lose all these stocks in the market with the intention to then buy property to get smoked. To these people, I will say this: ITS NOT THE DIET HAPPENS. Banks spend "release of controlled assets." They are gradually going to release their large stock of foreclosed homes to the market in small amounts over a long period of time. This is a BIG thing, because it saves value and keeps prices from falling. This makes all current homeowners happier and more confident overall. It is absolutely necessary in this market, and this is one of the few things that banks do RIGHT, in my opinion. This strategy is the only reason you should settle for ransoms. There are so many of them (and they continue to flow) that it will take a long time to absorb and sell all these non-performing assets. Thus, I see that foreclosures are a significant part of the total volume of transactions that have been going on for at least the next 18-24 months.
Moreover, I previously talked about ALT-A loans that will arrive and be reinstalled. Many people believe that this round of mortgage write-offs in the next few years will be much worse than before. It is important to note that the size and scale of these loans are not as large (or bad) as subprime loans, which started a mess on the mortgage market. Yes, this is a problem, but as many industry experts say, the worst is over, and now the problem is how to assemble the pieces and make this picture whole again.
Finally, since the beginning of 2008, we saw almost all real estate development in all parts of the country. The population has not stopped growing, but the development of new homes over the past 2 years has been flat. Expect home builders and developers to get back on their feet when prices begin to provide support. The fact that there was no new building testifies to the restructuring that took place in the years before 2008, and since then the reminder has either been sold cheaply or organically absorbed. Despite this, a new development will be needed sooner than later to catch up with demand, but this lack of construction has also become one of the other reasons for price support in the market as a whole.
So what to do now?
Therefore, for investors, proceed carefully. The best deals are at the bottom of the market (up to $ 250,000) or in large commercial projects where the main investor / developer finished the money. I will not disclose my best sources in this newsletter, but call me for the most profitable sources and property listings for San Diego.
For sellers, 2010 will really be a great time to sell. Inventory to 2-month supply is currently in most parts of San Diego, which means it’s a seller. Thus, most places are starting to see an increase in value. Buyers tend to find and buy good property, and there is a lot of competition, so your property will get a lot of action (assuming it is below 700,000 US dollars) - more and more it becomes more and more difficult as you increase the purchase price - therefore, if you You are one of those homeowners who are thinking of selling a high-priced home — go out now while you still can.
For buyers: 2010 will be a year of ups and downs, but, for the most part, there really hasn't been such an opportunity for quite some time. We will see a few record months, and then some real dead months depending on market fluctuations (strongly tied to financing loans). Getting a loan through will still be difficult, but not as bad as in 2009. Availability is 30 years, and interest rates are near historical lows. As more and more people become aware of this opportunity, more buyers will enter the market, which will help to further stabilize the market and increase purchase prices. I predict a low, unequivocal sign for most of the zip codes on all right for San Diego in 2010. This is a phenomenal time to think about making your first purchase or selling your home to go to a larger home for your growing family. I’m actually finishing a book, specifically aimed at first-time buyers, that will help you get through each step of the process. My book will be available in Q1 2010, available on Amazon.com, and will be a great help for those who want to buy their first home. For more information about this, call or email me at any time.
In general, 2010 will be a strange year in real estate. I do not see a fundamental tendency to work, because all market segments are adjusted at different times and with different intensity. In addition, the government and banks continue to tinker with processes that are trying to improve efficiency with short sales, buybacks and loan modifications, and the results will be mixed. I'm sure there will be unexpected surprises and anomalies, but the point is this: if you need help with real estate, use a professional and call us at any time. We are here to help you realize success.
You can experience health, wealth and joy in 2010. We will be happy to hear from you and will be happy to help you or your friends who need solid professional service, advice or help. If you know someone who can use our level of service, send us your information and we will follow and care for you.
