They say that only a fool makes predictions – especially about the future! So, in total disregard to that wisdom here I go with my top five predictions for Real Estate in 2009. Locally I will be watch inventory and transaction volume trends and will be sharing updates on www.sellpdx.com.
1. The U.S. Government will ramp up involvement in loans and add tax credit incentives to encourage more people to buy real estate and speed up the economic recovery.
2. Inventory in the US will remain at its current 10-11 month levels for all of 2009 except in areas that are having current declines due to over-pricing rather than over-building.
3. Portland will have two markets in 2009: Close in and well kept will stay very strong, Suburban and distressed will see steady declines through the year due to being more heavily impacted by foreclosures.
4. People will stop using their homes like credit cards due to a shift away from being ultra leveraged back to having an actual savings plan and increased difficulty in getting HELOC’s and 2nd Mortgages.
5. Jumbo Loans [where the loan is over ~$419,000 in Portland and higher in some markets] will have interest rates more in line with comforming loan rates and not the current rates which are much higher.
Wild Cards to watch for: Credit Flexibility, Government Intervention, Energy Prices