As we approach 2009, it is virtually impossible to ignore the unprecedented events of the year gone by. The Wall Street meltdown and its ongoing bailout, the sub prime mortgage crisis, the volatility of the oil market and, of course, a new administration has and will dramatically change the face of the San Mateo County real estate market.
While 2009 will be a difficult year for many, it will also bring unprecedented opportunities.
Here are some predictions for 2009:
- San Mateo Count home prices will continue to decline, but the dramatic price drops seen between 2006 and 2008 are unlikely.
- Greater affordability will drive an increase in existing home sales of properly price properties.
- An increasing number of real estate agents will leave the business because they don’t recognize or can’t adapt to the market changes.
- The next wave of adjustable rate mortgages will reset causing mortgage defaults to remain at high levels as job losses mount and economic growth slows.
- Short Sales will increase as loan modification efforts are exhausted and the majority of loan modifications default again.
- Home owners behind in their mortgage payments with no equity in their homes will ask if they are better off selling their home on a short sale, absorbing a less serious credit hit and becoming renters for a few years.
- Investors will become a larger percentage of the buyer pool as rents climb.
Historically, financial disruption brings profit opportunities. Those willing to act boldly, in spite of negative news reports, will be rewarded.
Have your own predictions? I’d love to hear them.
In our next blog entry I’ll share some of the best suggestions to take advantage of today’s market conditions and show how you can use the market forces in your favor.
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Raymond Stoklosa, Broker/Co-Owner
Chela Stoklosa, Realtor/Co-Owner
The only change I would make is that the rental market will see a huge increase in inventory while at the same time we’ll see a huge rise in unemployment. This confluence of issues will cause a surplus in rental units, driving rents down. Investors will walk away from vacant properties just as the homeowners before them.