We're bombarded daily with headlines about real estate, the economy, home prices...our commitment to our clients and friends, on a regular basis, is to boil down the national headlines and hype into what you need to know to make important decisions.

In a nutshell, expect interest rates to start climbing shortly.

To our clients who have already taken advantage of this buyer's market and these historic low interest rates, or successfully sold your home, congratulations!

To those who have been WAITING to take advantage of this market, it's time to jump.

Many analysts are predicting that interest rates will be rising within 180 days. No one has a crystal ball, yet let's not ignore the signs we see. Details attached.

For buyers who are financing, higher rates mean thousands of dollars in extra interest over the life of a loan.

For sellers, higher interest rates translate into a smaller pool of buyers who can qualify to buy your home.

If selling or buying has been on your back burner, the time has come to move it up front.

Where are we going in 2010? Is the worst over?

First, let's take a look at where we've been.

Late 2006 to present: We predicted the market was going to drop at least 20% per year for the next 2-3 years, and that’s exactly what happened over these past 30 months.

Spring & Summer 2009: Buyers jumped back in, finding value in the real estate market once again. Appraisal issues have kept prices down over the summer despite a healthy supply of buyers and strong sales. As we look back at 2009 we will find that home prices dropped at annual rate of 9-12 % not the 20% plus of 2007 & 2008.

What will occur in 2010?

We will see inventory start to build back up from November 2009 through February 2010, the best values based on price and condition will sell, with a large percentage of sales still coming from the distressed category. Expect low appraisals to remain an issue. 2010 should see an increase in bank-owned foreclosures on the market, 90% of these bank-owned will be priced under $175,000. Downward pressure will continue on prices. 2010 will also be the last year that we see interest rates below 6%.

Let's take a minute and look at the interest rates. What's keeping them low is the Fed's expansionary policies. The rapid increase in the money supply, funded by enormous purchases of Treasuries from banks, is holding down the short-term rates that the Fed directly controls. When the Fed cuts back its purchases of Treasuries, this will lead to higher interest rates. Don't be surprised to see home mortgage interest rates to be in the 8%-10% range by 2012.

THE BOTTOM LINE:

If you're thinking of buying real estate for investment or a upsizing/downsizing your home, now through mid 2010 is the time to do it!

Call us to make a appointment so we can be prepared for the great opportunities ahead. If you know of anyone who is trying to enter the real estate market, the market is complicated and this is not the time to "go it alone". Call us, and let's get them the help they need. We are never too busy to help your friends and family.

Respectfully,

John & Maria Hoffman, Realtors
Tampa Home Group
Keller Williams Realty
20701 Bruce B. Downs Blvd. #200
Tampa, FL 33647
Maria: 813-991-1406
John: 813-907-2555
Fax: 866-897-0571
mariahoffman@verizon.net
johnfhoffman@verizon.net
www.TampaHomeGroup.com