The Two Great Unknowns in the Real Estate Market will Determine 2010

Seller

Due to low interest rates and the goverments tax credit the market looks like it is in the process of bottoming out. Reports have the bottoming happening as soon as March 2010. But as economist point out there are two factors that may change that:

1. The "Shadow Foreclosure Market"

Everyone has seen a house go into foreclosure yet hasn't come on the market yet. Nobody knows how many homes are actually in this shadow market. We don't know if the bank is doing this on purpose so as not to flood the market and preserve values or just is too busy to get them on the market.. But until this inventory is put on the market and sold there will always be the potential for a flood of low price homes hitting the market and creating a supply that the current demand can not handle.

In addition, there are many Americans trying to modify their loans to forestall the foreclosure process. If the bank allow the loan modifcations then there will be many homes that won't need to be sold. If not then there can be many more homes coming to the marketplace in the future.

2. Unemployment

If you don't have a job you can't afford a mortgage. You won't be buying a home or possibly affording the one you have. This could lead to more foreclosures and an even greater supply of homes on the market.

So while everything has been getting better there is still a bit of the unknown for 2010.