Where Is The Housing Market Going?

It’s hard to tell. Here are the issues that will determine the direction it heads. The better question is, “How is the government going to handle these issues?”

1. The Tax Credits for First Time Buyers and Move Up Buyers is gone on April 30th.
2. The government will stop buying mortgage back securities shortly. They have already spent 1.3 trillion dollars buying Fannie Mae & Freddie Mac mortgages. When the mortgage market goes to private money the mortgage interest rates will go up.
3. There are 9 million homes in the U.S. in some form of default at this time.
4. All of the adjustable loans will begin to adjust the monthly payments upward starting in April. Most of these ARM Loans will default.
5. For whatever reason, bank owned properties are not being placed on the market; thus the number of homes for sale is down. In February 2009, there was an 11 month supply of homes for sale in the Inland Empire. In February 2010, it was only about a 3 month supply. Houses currently on the market that are priced right get 8-10 offers from buyers wanting to buy now.
6. Lenders are moving away from foreclosures and going to Short Sales. Short Sales are accomplished faster, plus they lose about 1/3 less money than foreclosing on a property.

Where is the market going? Who knows!