After a year of serial crises from Wall Street to Main Street, the housing market is entering 2010 on a positive note, with 44 markets expected to appreciate in the year ahead. While the road to recovery remains rocky, hopeful signs exist in even the hardest hit parts of the country where bargain hunters are enjoying a bonanza. See the following article from Housing Predictor for more on this.
It’s the season of comfort and joy, Christmas trees and Santa Claus flying down the chimney. All of us wish for World Peace. We hope for a New Year that will be better than 2009 when the World’s financial system nearly blew up on Wall Street.
In the face of all the dire financial news there is good news these days here from Housing Predictor. Forty-four markets are forecast to experience housing appreciation in 2010. Markets are pushing out of their downturns. It looks as though the housing market is finally on the mend!
And it’s not just because of rising home sales triggered by government tax incentives. Lower mortgage rates combined with prices that have been reduced so more people can afford homes are getting buyers off the fence.
There’s no saying this will be an easy turn around especially in the 10 states with the highest number of foreclosures like California, Florida, Michigan, Nevada and Arizona. But there are major changes developing in markets that have been severely impacted by the housing crash and accompanying financial crisis. Ohio’s markets are seeing more sales activity and housing prices are forecast to rise for the first time in years.
Some of Michigan’s housing markets are actually on the mend, despite the troubled auto industry and high unemployment. Investors are flocking to Michigan in search of deals. Conditions are actually showing major signs of improvement in Michigan, where a housing depression has been underway for more than five years.
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In 2010 there will be plenty of financial challenges to withstand not the least of which will be Fannie Mae, Freddie Mac, GMAC and (AIG) American International Group. As the biggest banks pay back their government debt, the four financial giants are on life support and the financial toll could reach $1-trillion for the four powerhouses.
Shattered with a record volume of foreclosures, Fannie and Freddie, the two biggest insurers of home mortgages and AIG need more government money to improve their balance sheets. The risk they pose to the entire financial health of the world is massive. The four businesses sold mortgage guarantees at rates as low as 2% on a dollar.
At the same time an increasing number of banks are failing trapped in the fall-out of the financial crisis. As the business of making loans improves and the crisis unwinds in the New Year more banks are certain to fail and be taken over by other stronger banks through the FDIC.
As some of the worst affected markets in the country undergo transitions moving towards stabilization the bottoms of housing markets will appear. Bottoms don’t come all at the same time in real estate markets, but are staggered like dominos across the country from one market to another.
The recovery will take years to work through the system. The mess was developed over at least the term of a full decade as Americans wore blinders to the reality of the foreclosure epidemic, but didn’t have Rudolph’s radar to follow. The increase in home sales is no Santa Claus rally. Economic growth was weaker than expected by many analysts in the third quarter.
The foreclosure epidemic, which Housing Predictor forecast more than three years ago, will delay steady, stronger growth as foreclosures mount. But bankers are beginning to work with troubled homeowners in greater numbers to modify mortgages, and reduce mortgage amounts in the case of short sales.
Those moves alone give the nation hope for the New Year. Merry Christmas!
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.