The Real Estate Monkey’s 2010 Predictions
Real Estate Monkey | January 1st, 2010 - 4:26 PMHere I sit on the 1st day of a dawning decade and look back at my prediction I made for the 2009 year. Overall, I was in the headed in the right direction save a few missed predictions; however, the ones I missed doesn’t mean I was wrong, just my off on my timing. The year ahead shall reveal itself to be little, if at all, different from the one we just experienced. I think you’ll see more people lose their residence and fewer new home starts around the country. I am not a “doom and gloom” kind of guy, in fact I am quite the opposite; however, you can not be blind to the past if you want to thrive in the future.
So….
Prediction #1: Commercial foreclosures will be huge. The commercial foreclosure problem that we have heard about up to now is about to crash into us in a manner that even the banking experts can not fathom. One of the greatest features of real estate was the ability to leverage money to buy a greater property than one could afford. Leverage made it possible for property to control 10 dollars with 2 dollars or 20% equity. Unlike residential loans of 30 years, commercial bankers write loans for 3, 5 or 10 years so as to be locked into a 30 year note. Traditionally in the “good” days, a bank would merely rewrite (refinance) the loan when it cam due, after all the client was a good friend and paid his loan payments on time.
However, now with most banks unable, unwilling or flat-out gone all of those loans coming due this year and over the next few years will NOT be refinanced thus placing those investors, landlords and developers in a position where they have no choice but to go into foreclosure and consequently end up in a short sale position. Hundreds of millions, potentially trillions of dollars worth of defaulted loans will find their way to the open market place over the next 36 months. I believe you will see a shift in the players of commercial real estate. Older bigger names will be in trouble and newer lesser know people will take over the market when they buy the bigger names’ defaulted loans.
Prediction #2: Government assistance means nothing. The fact that the Federal Government has extended the “first time home buyer” incentive PLUS added a previous home-owner incentive for those who qualify will do absolutely nothing to stimulate the market. The extension of this deadline plus adding more who qualify should be glaring sign to anybody that the previous stimulation attempt did NOT work well enough to satisfy the “people.” Thus an extension was necessary. Couple the rising unemployment numbers and the populations’ uncertainty of all of the other world markets will be enough to freeze consumers in their spending tracks, not even a tax credit will be enough to move the market again. YET!
Prediction #3: Housing starts will fall below last years numbers. The prediction #2 will spill over to the new housing market as well. When and if people start buying homes again, they will immediately start shopping for bargains, read into this “previously owned homes that went into foreclosure.” REOs, HUDs and short sales will saturate the market and make the new home sales virtually non-existent. Society has always sought out cheaper products and more economical ways to provide for themselves. Wal-mart and Meijers should be an excellent example of this paradigm, why not houses? The traditional investor mindset will be contracted by virtually every homebuyer this year “Buy low, repair and benefit from the appreciation” when the market come back to full strength. Buying a new home at current market value and paying full price will become a thing of the past.
Prediction #4: The rental market will continue to boom. Once again my prediction from 2009 will still hold true. During this boom of foreclosures and short sales people with bad, tarnished or questionable credit will still need a place to live. Hello landlord utopia. Please don’t think that any of the Government assistant programs will save this section of the market, those programs are designed for first time home buyers and other who have lived in their home for the last five years NOT the ones that went through a foreclosure, bankruptcy or short sale. So these masses will be left with no other option than to rent from people like you and me.
Prediction #5: Residential foreclosure rates will remain steady throughout the year. If you will see the connection between these predictions you will agree that if one is true they all will be true due to the inherent dependency between them. With the banks not lending, companies laying people off their jobs and the population spending less money in the retail sector, foreclosure will continue to climb to a rate that will astound both you and me…well not me as I am the one telling you this will happen.
I apologize to those of you that have read this and feel that I am negatively forecasting a bad year. I am merely guessing at what I see is coming unless we as a society start to make some changes in our spending patterns, work habits and saving concepts. I feel that this year will start on a low note and generally pick up towards the late fall. These issues that I have predicted will be rectified by years end with 2011 becoming the year of the real estate boom, ONCE AGAIN
Thanks for This Nice Read!! Foreclosure List
Hello, I have been following your website for a while, and would like to to ask you a question if you don’t mind. I’ve just set up my site and seeking ways to advertise my website in the search engines, as I’ve been getting some direct hits from Google and want to strengthen it. I’ve been reading what this website writes about link building and SERP’s in Google http://webmasters-tools.info/i/link-building.php I’ve learnt the more backlinks I have to my site, the higher my position in Google it will be. But I was just curious if others in the same genre as us have been using it, and if you would recommend it? I would genuinely appreciate your opinion, as I’m not sure whether to implement it. Thank you
)
I just wanted to stop in and let you know that I really liked this post. It was full of fresh information and creativity, both of which we always need.
What A Wonderful Blog Post…
[..] I saw this really good post today and I wanted to link to it. [..]…
I like the layout of your website. Check out the graphics on my site at http://www.publicdomainpayday.com
Super-Duper site! I am adoring it!! Will come back again – taking you feeds also, Thanks.
Thank you so much, Great information… You keep writing and I’ll keep reading.
I am fascinated at how interesting the information is on this web page. I have written down this webpage and I really plan on visiting the site in the next few days. Keep up the great work!
Like your blog
I’ll check your site later again.
Good blog. I will bookmark and grab your feed.
This is wonderful! Thanks for the information
I Really like what you have done with your blog! Will you please check out my site? It is new and i would like to show it off! The site is http://www.publicdomainpayday.com
Intimately, the article is in reality the best on this notable topic. I agree with your conclusions and will eagerly look forward to your incoming updates. Just saying thanks will not just be sufficient, for the phenomenal lucidity in your writing. I will immediately grab your rss feed to stay abreast of any updates. Genuine work and much success in your business enterprise!
I extol the valuable post you provide in your post. I will bookmark your site and have my family check up here regularly. I am rather sure they will learn lots of new stuff here than anybody else!
Hello there – just a quick note to say kudos for this entry. Very great.
I am excited that I found your website . Looking forward to learning more about you.
I sell Spanish Fort Real Estate in AL . Look at my website . I am searching for ways to expand my network . 
Glad that I came across your blog .
Cool, there is actually some great ideas on here some of my subscribers may find this relevant, I will send them a link, many thanks.
Unlike many posts on the internet, this was fun to read and gave me some valuable input. I will have to put a backlink on my website. Regards. J
This was without a doubt worth the time.
Dig the post.
The information presented is top notch. I’ve been doing some research on the topic and this post answered several questions.
I like the layout of your website. Check out the graphics on my site at http://www.publicdomainpayday.com
Awesome I adore most of the articles which have been written, and especially the comments posted! I will definately be visiting again!
Your bookmarking strategy is working as I Found you through Stumbleupon. My Oral Exam Blog – http://begginerslearnforex.blogspot.com
Saw your blog bookmarked on Digg.I love your site and marketing strategy. Check out my website if you get a chance, just click on name. My Oral Exam Blog – http://begginerslearnforex.blogspot.com
Saw your blog bookmarked on Digg.I love your site and marketing strategy. Check out my website if you get a chance, just click on name. Check out my Valentines Day Lingerie Website if you got time – http://tinyurl.com/ycyjopf
Your website looks really good. Being a blog writer myself, I really appreciate the time you took in writing this article.
strange this post is totaly irrelevant to the search query I entered in google but it was listed on the first page.
I really liked reading your post!. Quallity content. With such a valuable blog i believe you deserve to be ranking even higher in the search engines
. Check out the link in my name. That links to a tool that really helped me rank high in google. This way even more people can enjoy your posts and nothing beats a big audiance 
The writer of realestatemonkey.com has written a superior article. I got your point and there is nothing to argue about. It is like the following universal truth that you can not disagree with: The Matrix has you. I will be back.
Although we dwell in a residentai aapartment. I found a way to have a better living space. I rented a condo and a studio with connecting wall, and broke the internal wall. now I have a fancy place to live in.
Happy to see that there are blog proprietors that care about their blogs and not write all kind of inutile stuff but rather try to keep it complete and valuable for the sake of their readers. You’ve done a great job and i thank you for that and as well for not shocking me with unuseable garbage and spam.Thank You
Great articles
good topic. i like the article
Great site I
Hello. This is kind of an “unconventional” question , but have other visitors asked you how get the menu bar to look like you’ve got it? I also have a blog and am really looking to alter around the theme, however am scared to death to mess with it for fear of the search engines punishing me. I am very new to all of this …so i am just not positive exactly how to try to to it all yet. I’ll just keep working on it one day at a time Thanks for any help you can offer here.
Very nice post I enjoy your site keep up the good posts
Nice website. Great read.-Check out my Farmville Guide if you get a moment – http://bit.ly/bqUYf4
Well, the article is in reality the freshest on this notable topic. I harmonise with your conclusions and will eagerly look forward to your future updates. Saying thanks will not just be sufficient, for the phenomenal lucidity in your writing. I will directly grab your rss feed to stay privy of any updates. Gratifying work and much success in your business endeavors!
Fabulous site! I will most definitely recommend you to my buddies. Please carry on with the excellent updates. Are ya on Twitter too??
Another great post!
This was a challenging read to grasp.
very nice blog.
Thank you for taking time to write such a easy to read article on this topic.
Your blog is awesome! I found it on Yahoo and couldn
Saw your blog bookmarked by friend. Nice webpage.
Very good post. I’ve found your site via Bing and I’m really glad about the information you provide in your articles. Btw your blogs layout is really broken on the Chrome browser. Would be really great if you could fix that. Anyhow keep up the great work!
You made some Good points there. I did a search on the topic and found most people will agree.
Unique, that is for sure. You give a excellent view on things, I will make it a point to check back very often.