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Posts Tagged ‘predictions’

2009 Real Estate Prediction – Rents will Rise

Wednesday, November 12, 2008 posted by Tommi Crow

Prediction:  2009 will be a good year to be a landlord, as five factors collide to make rents rise in 2009.  

  1. 1.  An estimated 1.9 million homes will be foreclosed upon in 2009, which will tranform these former homeowners into tenants.
  2. New construction will grind to a halt, which means fewer rental properties will be available.
  3. As credit remains tight, potential buyer’s will be forced to renew their current leases after they are turned down for a mortgage.
  4. Consumer fear and an uncertain employment picture will keep would-be, credit worthy buyer’s on the sidelines, meaning less turnover in rental housing.
  5. Thousands of Americans who have been burned by recent homeownership will decide that ownership is not worth the risk and trouble.  They will sign a lease for the ease and flexibility, and happily return to rental living.

Investors and Landlords Take Note:  This convergence can be summed up in two words.   Higher Rents.  As the demand for rental units outstrips the supply, the upward pressure on rental rates will occur naturally.

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4 Economic Prediction’s for 2009

Tuesday, October 28, 2008 posted by Tommi Crow

As the owner of a small, woman-owned business for the last 25 years, I have experienced a lot of market up’s and down’s.  And, while the 2008 market is unique to itself, it does have similar traits with other declines in the real estate, financial and equity markets that we can draw from.

So, what does my experience tell me about predictions for equities and housing in 2009?

  1. Housing has further to fall in 2009.    Housing has a bit further to fall as inventories remain at historical highs, and new inventory is being added daily.   We are currently foreclosing on 10,0000 homes per month on average, and the end is no where in sight.  The numbers of loan deliquencies and defaults are increasing, keeping downward pressure on home prices and upward pressure on unsold inventory.  
  2. More Trouble Finding or Keeping A Job in 2009.   The U.S. unemployment rate is growing along with the national debt.    As business continues to slow, we will see more layoff’s and company closings in industries such as building and contruction, financial’s, auto’s, airlines, travel and retail.
  3. Credit Problems in 2009.   Lenders will be very cautious about loaning money, even to their best customer’s, until they divest themselves of unperforming assets.  The spread’s on mortgage rates will remain high in 2009, increasing the costs to borrow.
  4. Wall Street in 2009.   The stock market looks forward, not backward.  The recent sell off was not caused by horrific events which occurred in 2008 or earlier.  The recent, unprecedented stock market decline, tells us that Wall Street expects and has priced in, that 2009 will be one of the worst ecomonic periods in U.S. history.   If the street thinks the economy will improve in 2010, then 2009 should be an up year for equities.  But, sit on cash for now, as it is really too early to tell.

For all the reasons above, I do not see a rosy 2009.  But, that being said, I do see the opportunities that will present themselves.   With regard to housing, I think we are nearing the bottom and price declines indicate that a lot of the risk is off the table.  For those that are investing in real estate for the long term or for a place to live, I don’t see prices getting remarkably cheaper from here.  Buyer’s planning to hold for five years would probably do well to take advantage of today’s interest rates.  I see higher lending costs in the future, due to government borrowing, earning slowdown’s and regretable past mistakes.

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