As "they' say it not over till it's over,and this first week of 2010 we have heard more than a few perspectives of what to come in 2010. A few things that I heard that made me think is that is not over yet.

1) Arm Rates have reached the  3 -5  reset date, According to one business journalist:."The big wave of Option ARM resets has yet to come, and given the drop in home prices, refinancing won't be realistic.".

2) Municipal Defaults: yep, local towns and counties are feeling the pinch with foreclosures and tax defaults draining their coffers.  And when a town goes broke, it will put their resident's property even further underwater.

 3) Loan modifications aren't working.  Unless and until there is meaningful principal reduction, most people getting a loan modification will stop making their payments if they are $100,000+ upside down on their home.  And there are A LOT of people upside down.  There will be lots of "jingle mail," where the homeowner just sends back the keys to the bank, this year.

4).  Commercial Real-Estate Collapse: The second largest chain of malls has already declared bankruptcy.  Obligations needing refinancing in the commercial market are in the trillions. And most of them, even with positive cash flows, are as underwater as residential mortgages.  As these businesses crash, they will cause even more unemployment.

So when will it be over -- we an economist  said we really will not know until long after we should have known

Just rememebr all Real Estate is local and now more than ever Hype Local so work with a Realtor that New the details of your market .

Biggest Buyers Market

When it comes to short sales, investors would do well to take a look at these major metropolitan areas presenting the largest peak-to-present value price drops. There are a variety of reasons each area has experienced larger than average price drops; from over building in Orlando to unemployment in Modesto, pressure on pricing has resulted in once in a lifetime bargains. Other areas such as Port St. Lucie or Lehigh Acres in Florida have been hit by a perfect storm of unemployment, over building and aggressive sub-prime lending practices combined with lax zoning standards to create a dramatic excess of inventory that could take years to absorb. Whatever the original reason, the result is clear...a big buyers market for those in the know.

Other hard hit cities throughout the nation include the following metro areas:

Merced California - With over 62% drop from highest price, the average cost of a home in Merced was $336, 750 in Q2 of 2006 compared to only $127,585 by Q3 of 2009.

Stockton/Modesto California - Both cities have lost roughly 54% of value since their former high in 2006. Today the average price is an affordable $168,000/$151,000.

Las Vegas Nevada - After a huge building boom during 2005 and 2006, Las Vegas residents are walking away from homes previously valued at over $300,000 which are now selling for just under $160,000.

Port St. Lucie Florida - After reaching a peak price of over $281,000 in 2006, prices in Port St. Lucie are lucky to bring in $151,000 as of Q3 of 2009. In fact, nearly all of Florida has been extremely hard hit due to a combination of high unemployment, sub-prime lending standards and an unprecedented building boom. Fort Myers, Cape Coral,

Naples, Marco Island, Bradenton, Sarasota and Venice are just a few of the other cities experiencing in excess of 40% or greater price decline.

Detroit - It should come as no surprise that Detroit and surrounding areas have been especially hard hit due to high unemployment despite the fact the building boom managed to miss much of Michigan. Affordable homes reached a high of $155,000 during 2005 but continued to plummet in price to the new low of just over $107,500 by the end of 2009.

Bottom Line - short sale investors looking for the best prices as compared to former high's should concentrate their efforts on California, Nevada and Florida. Those searching for affordable housing alternatives may do well to examine Michigan and other areas of the mid-west that managed to escape much of the building boom from recent years. The greatest price stability is to be found in the New England states where prices remained relatively unchanged yet present some price reduction as compared to the past few years.

 Experts from a range of political leanings, speaking at American Economic Association's annual gathering, were in agreement when it came to the chances for a robust and sustained expansion in 2010.  It won't happen.  Many predicted U.S. gross domestic product would expand less than 2% per year over the next 10 years. That stands in sharp contrast to the immediate aftermath of other steep economic downturns, which have usually elicited a growth surge in their wake.  Housing was at the heart of the nation's worst recession since the 1930s, with median home values falling over 30% from their 2005 peaks, and even more sharply in heavily affected states like California and Nevada.  The decline has sapped a principal source of wealth for U.S. consumers, whose spending is the key driver of the country's growth pattern. The steep drop in home prices has also boosted their propensity to save.  "It's very hard to see what will replace it," said Joseph Stiglitz, Nobel laureate and profe  ssor of economics at Columbia University. "It's going to take a number of years."  One reason is that U.S. consumers remain heavily indebted.  Another is that many of the country's largest banks are still largely dependent on funding from the U.S. Federal Reserve and the implicit backing of the Treasury Department.  He cited government programs giving large financial institutions access to zero-cost borrowing as artificially padding their bottom lines.  "There's something of an illusion of profitability," he said.

Jobless claims down

 The Labor Department says there were 432,000 initial jobless claims filed in the week ended Dec. 26, down 22,000 from the previous week's revised 454,000, and the lowest since July 19, 2008, when there were 413,000 claims filed.  A consensus estimate of economists surveyed by Briefing.com expected claims to jump to 460,000.  Jobless claims have been trending downward since the end of March, when they peaked at 674,000, the highest figure since 1982.  4,981,000 people filed continuing claims in the week ended Dec. 19, the most recent data available. That's 57,000 down from the preceding week's revised 5,038,000 claims.  The 4-week moving average for ongoing claims fell by 122,250 to 5,101,250 from the previous week's revised 5,223,250.  However, the fact that employers are running out of people to lay off isn't necessarily a good thing.  The slide may signal that more filers are dropping off those rolls into extended benefits.  The employment picture will continue to improve a  s jobless claims continue to fall, but Tim Quinlan, economic analyst at Wells Fargo, said they will need to drop near 350,000 for positive job growth

Making Home Affordable a disaster

 Critics of the Obama administration's $75 billion program to protect homeowners from foreclosure increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes, and some economists and real estate experts now contend it has done more harm than good.    They say many desperate homeowners have sent payments to banks in efforts to keep their homes, wasting dollars they could have saved in preparation for moving to cheaper rental residences.  Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.  "The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis," said Kevin Katari, managing member of Watershed Asset M

 anagement, a San Francisco-based hedge fund. "We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway."  Mr. Katari contends that banks have been using temporary loan modifications under the Obama plan as justification to avoid an honest accounting of the mortgage losses still on their books.  Only after banks are forced to acknowledge losses and the real estate market absorbs a now pent-up surge of foreclosed properties will housing prices drop to levels at which enough Americans can afford to buy, he argues.

About 1 in every 7 home loans was either past due or in foreclosure at the end of the third quarter.

About one in every seven home loans in the country was either past due or in foreclosure at the end of the third quarter, according to the Mortgage Bankers Association's most recent National Delinquency Survey. That's the highest delinquency rate in the survey's history (the data begin in 1972).

 It's important to note that mortgage delinquencies continue breaking records in the face of Uncle Sam's sweeping effort to keep struggling borrowers in their homes. Although the initiative has put more than 650,000 borrowers into trial loan modifications, there is growing concern that the Obama administration's initiative isn't well-suited for today's housing crisis. For example, although unemployment is the key force behind current delinquencies, borrowers who can't make mortgage payments because of a job loss can't participate in the program. Observers in growing numbers have called this a key shortcoming of the Obama administration's housing rescue. Expected Failure rates of those on currently in "Loan Modification" status to be 1 in 3 Foreclosure Rates will continue to raise in early 2010

So as they say in Minnesota

FARGO and much MOORHEAD 

What is ahead for the housing market in 2010 -

Ran across this information today from By Christopher Solomon of MSN Real Estate

and wanted to make sure all Buyer had a chance to see it... the market is only going to get hotter in 2010 so be sure you have the most update information....

 1. Choose a reputable auctioneer. First, do your research by poking around the auction Web site's "About" page; find out when the site was established and how long it's been in operation, says author Roberts. Make sure the business has a real street address or mailing address, not just a P.O. box, he says. Make sure the business has a phone number you can call -  and do so, asking the person who picks up the phone about the business.

If the service requires you to pay a deposit prior to entering a bid, make sure you're paying the deposit to a reputable escrow company, not to the individual running the auction, warns Roberts.

2. Do your homework. It applied in seventh grade; it still applies. When you see a property that intrigues you, know what you're getting into, says Bid4Assets' Lauroesch.

How? Several ways:

• Know what properties are worth in the area where you're looking. You can start by reviewing local listings, checking out open houses for similar homes and by using online home-valuation tools. 
• Go and physically look at the house, and have it inspected if possible: "Foreclosed properties unfortunately do have a tendency to be damaged by the people who are leaving the property," Lauroesch says.
• Have your financing and money lined up so you know what you can spend.

3. Do more homework. Do a title search. Either ask to be provided one, or go to the county records office and get one. You're checking to make sure the property can be bought free and clear, with no liens.  And if there are liens, ensure that they can be satisfied in the transfer process, says Lauroesch. Have this document interpreted for you, says author Sherby.

4. Know the law. "Foreclosure is not a national thing; it's administered on a state level," says Sherby. Get familiar with the laws in the state where you want to buy. (You can see RealtyTrac's foreclosure laws here.)

For example: In New Jersey, Sherby says, if you buy a home at auction, the owner still has 10 days to reclaim the property if they somehow can come up with the money. "You will still be refunded your money, but some of these rights of redemption can go for up to one year," complicating a would-be homeowner's plans to fix up and perhaps sell a property, he says. "It restricts your ability to do anything with that property," he says (though he concedes that 99 times out of 100 the previous owner will not redeem the property. If they could, "it wouldn't be in foreclosure.")

5. Tally all the costs. Make sure you weigh all the costs of buying that home before you go for it, everything from how much repairs will cost to how much the financing will cost you, says Sherby. And here's something auction newbies may forget: Depending on the auction, there can be a "buyer's premium" of 10% to 15% tacked on to some properties sold at auction; be sure to study the terms of sale, advises Williams.

 

6. Think local. "I think the online auctions are great, but I still think that to be a successful investor you still need to invest in your neighborhood," says author Roberts. That means buy close to home, ideally in a general circle in which you travel in your regular life. "In every circle you travel, there are opportunities," he says.    

Why hyper-local? "Because you know the area. You can drive to the home. You can maybe even find a tenant whom you know to occupy the home. The farther it is away from you, the higher the chances you could be a victim of fraud," he adds. "The houses I own, I can drive by them on the way to work. In fact, I drive by one of them each day on the way to work."