What will 2010 hold for us? It's tougher to say right now than it was at this time last year. There are 2 factors that are artificially propping up the market:
- super-low interest rates
- the $8000 closing cost credit
Not until these 2 things are gone will we know how the year will shake out. Until then, here's what we DO know so far:
Analysis: closings were down over 25% in 2009. That is the reason for the continued translation to lower prices. It should stay this way until we see a SUSTAINED improvement in contracts and closings. "Sustained" is the key word. It will be interesting to see what happens to the market when the Fed buyback of bad loans AND their housing credits both expire. Until then, things look artificially good right now.
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