Real Estate in 2010 - Is This the Perfect Buyer's Storm? PDF Print E-mail
Written by Karen Lissack   
Friday, 05 February 2010 11:46
If you are looking for a larger home for your growing family or are interested in purchasing real estate for business purposes, you are probably thinking about making a purchase or two in the upcoming year. This brings to question whether the current economic storm is perfect for real estate investments, or not.
by KarenLissack


If you are looking for a larger home for your growing family or are interested in purchasing real estate for business purposes, you are probably thinking about making a purchase or two in the upcoming year. This brings to question whether the current economic storm is perfect for real estate investments, or not.

This is an exciting time in the real estate market, but there is also a lot of upheaval, confusion along with the low prices. There will definitely be some changes in the market in 2010, so seriously ponder whether buying real estate now is the right move for you.

On one hand, this is the perfect time to make a purchase since the value and selling price of homes is set to rise in the future. This means you can buy a new home for your family without its value dropping a short while later. This also means you can pick up a cheap rental house and make higher profits in time, or buy cheap prices to flip for substantial profits.

With the economy still unstable, many more homeowners will find themselves unable to pay their mortgages. It is said that 1 out of every 4 homeowners owe more on their mortgage than their home is worth. With many people losing their jobs, their mortgages will go unpaid and their homes will be lost.

Adjustable rate mortgages have also been a huge factor in the mortgage crisis, and many families are guaranteed to be forced out of their homes as more of those loans reset this coming year. When an ARM resets it can easily double the mortgage payment on the loan, which will make it unaffordable for many homeowners.

Another consideration is the expiration of a critical federal program in March. This was a program to help homeowners that allowed the government to purchase debt and mortgage backed securities from Fannie Mae and Freddie Mac. It has kept mortgage rates lower, but when it expires you can expect to see mortgage rates rise back up. Rates could go from 4.88% to 6% easily.

The Department of Housing and Urban Development (HUD) is also considering some other big changes for the real estate market in the upcoming year which might make securing real estate more difficult in the future. For instance, the required credit score could be much higher, you may be required to put down a substantially larger down payment, and insurance premiums could skyrocket.

The government is currently offering a tax break to get more buyers into the market. If a buyer purchases their first home by the end of June they will qualify for tax breaks of up to $8,000. If a homeowner purchases a second property, they will be entitled to a tax credit of up to $6500. While this may be most tempting for new homeowners, you should be prepared to make sure you can still afford a mortgage and have a steady source of income.

There may be other changes that come upon us in 2010, so if you are planning on entering the real estate market make sure you remain financially secure and will not stumble upon hard times like so many others. This can be an exciting time to make a purchase, but you want to make sure you can handle whatever happens over the next year or two.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Karen Lissack has been reporting about real estate and home related subjects for almost a decade and a half. She is proficient in various aspects in real estate from buying to selling, even investing. She is fully informed about chapel hill real estate and has helped people find the best chapel hill homes the market can offer.