Where will 2008 take Real estate market? Based on PropertyWala.com study of real estate facts and trends from 2007, here are professional home buying and selling predictions for next year.
Home Prices Will Turn down and Flatten
Median home prices will continue to fall in softened markets. They won’t take a nose dive; though, they will float, ever-so-gently like a feather, slipping left to right, then left again, and closer and closer to a landing spot.
Short Sales & Foreclosures Will Increase
Interest rates on 3-year and 5-year mortgage product will begin adjusting, and those who pay interest on mortgage product, including many buyers who used 100% financing in 2005, will begin to lose their homes. Many banks will refuse to negotiate short sales, paving the way for a flood of bank-owned properties to hit the market.
Interest Rates Will Become Constant
Rates will move forward and backward within one-quarter point, and buyers will gravitate toward fixed-rate mortgages. Buyers who cannot qualify for conventional loans will lean toward seller-financed instruments.
More Investors Will Enter the Market
Because investors use different criteria than traditional home buyers, investors will return to the market as they begin to recognize that a buyer’s market is an excellent time to purchase real estate. First-time home buyers will find themselves competing with all-cash investors, and the investors will win.
Buyers Will Write Lowball Offers
Beginner buyers will read newspaper headlines, figure out it is a buyer’s market and write lowball offers hand over fist. Some buyers won’t even look at homes before writing insultingly low offers.
Advertising Will Move Online
As newspaper promotion and readership continues to decline, agents will question whether their home advertising dollars are better spent elsewhere. Print advertising will lose its effectiveness. If postal rates continue to increase, agents will stop using direct mail campaigns and instead post Internet listings for better results and low-cost marketing strategies.
REOs Will Refuse to Pay Some Closing Costs
Banks are sick and exhausted of taking it in the shorts. First, agents tried to cram short sales down their throats, and then banks were doubly disappointed when no one bid at the trustee’s sales, leaving them stuck with unwanted inventory. Banks will demand bulk discount rates from title and escrow companies.
Flood Insurance Rates Will Rise
New assessments of flood risk may lead the federal government to redraw flood maps, possibly requiring more property owners to carry flood insurance or increasing costs. Home owners with preferred risk flood insurance policies could see rates double, while those who have no flood insurance could face paying rates that are 10 times higher than they would have paid under the old risk maps.
