Signs of Improvement Make 2010 a Promising Year, but more challenges are yet to come

But more challenges are yet to come . . .

2010 looks to be another year of low sales prices & fierce competition from other sellers. Foreclosures at bare-bones prices continue to give sellers plenty of competition.

Fortunately, today’s buyers are looking for move-in ready homes which excludes many foreclosures that are not in the best shape when they hit the market. Preparing your home for sale -- which can include cleaning, making repairs, making upgrades and staging -- can help your home stand out from the foreclosure down the street and get you a higher sales price.

#1: More Buyers Entering the Market
The First-Time Homebuyers credit extension and expansion to existing homeowners with higher incomes should encourage more 1st time buyers to purchase a home or move-up buyers to make the move.
#2: More Foreclosures to Come
Home values may be stabilizing in some markets, but challenges still lie ahead. Between rising unemployment rates, a backlog of homes already in the foreclosure process and many adjustable rate mortgages scheduled to reset next year, more foreclosures are expected to hit the market in 2010.
In an attempt to mitigate the effect of these new foreclosures, Fannie Mae has come up with a potential solution: The mortgage giant will allow some people losing their homes to foreclosure to lease those properties back for up to a year at market rental rates. (D4L or “Deed for Lease” program)The agency hopes this program will help stabilize neighborhoods by keeping more people in their homes. https://www.efanniemae.com/sf/servicing/d4l/
#3: Lending Standards Still Tight
According to the Federal Reserve, fewer banks tightened their lending standards in the third quarter of 2009. However, that doesn't mean lending standards have gotten looser, either. In 2010, banks will continue to keep the subprime mortgage debacle in mind and require extensive documentation and stellar credit from borrowers.
#4: Rising Mortgage Rates
In 2009, the Federal Reserve bought up a massive amount of mortgage-backed securities, keeping mortgage rates at historic lows for much of the year. However, the Fed is scheduled to end those efforts in March 2010, meaning mortgage rates could jump as much as a full percentage point next year. If you're considering buying a home, now would be the time to take advantage of historically low interest rates. If you're a current homeowner thinking about refinancing, act now.
#5: Tricky Appraisal Rules
Ridiculously inflated home prices in many markets contributed to the housing crisis, motivating the federal government to pass the Home Valuation Code of Conduct (HVCC) -- a set of rules that determines how appraisals should be made -- in May 2009. The law aims to distance appraisers from the real estate transaction so they can provide an unbiased, objective analysis of a property's market value.
Real estate agents argue that the system is flawed and deals are falling through because of the ever-changing, lengthy maze of rules. Long story short: With the new rules in place, appraisals now take longer, are more expensive and are often conducted by appraisers unfamiliar with the local market.
#6: Smoother Short Sales
In 2010, this problematic process should become much smoother. Lenders and real estate professionals alike are working on ways to streamline the short-sale process. More real estate companies are training their agents to do these specialized sales, and lenders will be more open to processing them.
#10: Cash Is King
If you plan on buying a home in 2010, especially a low-priced foreclosure or short sale, be prepared for competition. Demand is high for these properties, so it's not uncommon for bidding wars to break out over them. Real estate investors are particularly tough for regular buyers to contend with: Many investors are making all-cash offers, and banks -- who are often more concerned with making a speedy sale than with getting the highest price possible -- are accepting these offers over higher-priced offers where loans are involved. To stand out from the competition, make your offer as attractive as possible. That means saving up a sizable amount of cash for a down payment and making an offer that's close to -- or even above -- asking price.