Top 10 Real Estate Predictions for 2009

Sellers Will Shun Loan Modification Programs in Favor of Short Sales

More sellers will choose to pursue short sales or walk away from their homes in lieu of trying to do a loan modification.

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Home sellers will ask themselves if they are better off selling their homes on a short sale, absorbing the hit to their credit reports and becoming renters for a few years. Many sellers will turn to a short sale or walk away than try to directly deal with mortgage lenders.

Real estate agents who specialize in short sales will see an uptick of business.

• Little or No Appreciation as Market Bottoms
• Housing Inventory Will Fall
• Bank Will Rent Out REOs
• Buyers Will Compete in Multiple-Offer Situations
• Real Estate Competition Will Shrink
• Sellers Will Shun Loan Modification Programs in Favor of Short Sales
• Banks Will Pursue Foreclosure Options Over Loan Modifications
• Mortgage Interest Rates Will Spike
• Rental Rates Will Increase as Demand Increases
• Tax Breaks for Home Selling Will be Revised