The years 2007 and 2008 have been cloaked with a gloomy condition. While it's still early to predict what the real estate market can be in the 2009, there have been early indications of what's in store for us.
Generally, the real estate in 2009 will resemble this picture. Unlike the 30-50 percent declines in the previous years, there will no longer be a noticeable price drop as consumer confidence continues to falter. This seems like doom but there's no other lens to look from.
Luckily for those with a good credit standing, 2009 is the best time to invest in the real estate. This is just one of the few positive things left in 2009.
In states like California, the number of homes for sale will dramatically decrease by 45 percent or even more. This entails a domino effect on the industry. There will be at least 10% layoffs in the construction industry. Fewer homes will also mean fewer sellers.
Banks, as a dominant sector in the real estate, will release REO inventory slowly just to increase housing prices. Due to the increasing pressure experienced by these banks, there will an increase in revenue as they cut losses. Added pressures will also prompt these banks to outmaneuver rules to rent out houses rather than bringing them back to the market. This strategy can help banks raked in profits while waiting for the market to recover from a terrible financial damage. House rentals will also compel banks to furnish these properties.
Just to get ahead of the game, competitors will be featuring various real estate offers. But this does not mean that buyers will get easy on their spending. In this case, it's always cash buyers who win over those who apply for housing loans.
The real estate market in 2009 will have a tougher competition and a few competitors eventually. As a result of this, there will be a few choices left for home buyers. The need for a good negotiator is imperative during this time but the condition seems not to welcome experienced real estate agents since most of them will be leaving the industry.
When it comes to financing, the problem is not only limited to those with existing loans. People applying for loans will have to undergo a rigorous and cumbersome process with their banks. This may force home owners to sell their residential properties and settle as renters.
As to foreclosures, banks may change their rules just to accommodate foreclosed sellers to purchase another house after six months.
The gloomy state of the real estate market is based on facts and current trends. It would wise to keep track of the changes in the industry especially when it comes to new government measures implemented by the new administration. But before you expect for a turn around in the 2009 market, get yourself ready for the danger ahead.
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