Tax



credits appear at the surface to be helping drive the real estate market



right now, but in fact the total number of sales is still decreasing



from a few years ago.  What these credits are actually doing is



expediting the sales that were already taking place (and probably would



have taken place one way or another anyway), rather than increasing



the number or breadth of transactions occurring.  Eventually, the



tax credits will run out, and we will be right back where we were a



year ago—except with more unqualified home-owners.

      Further,



interest rates on mortgage loans from the bank are increasing in 2010,



to a standard of about 6%.  Loans are very difficult to acquire



these days, and very expensive if utilized.  What’s more, it’s



apparent that banks—unable to sell their real property at reasonably



profitable rates (or at least minimally costly rates)—are withholding



a great deal of inventory.  This becomes a serious problem down



the road, when they release that inventory, flooding the market and



dramatically reducing overall sale prices in the process.  Combine



all these factors—expensive loans, tax credits ending, inventory increasing—and



it would seem we are going to see even more foreclosures in the next



year or two.

      The



good news is, if you have the capital funding to do so, more and more



foreclosures mean greater desperation on the part of sellers and lenders,



and better opportunities for buyers.  It’s going to continue



to be a buyer’s market, to be sure.  With the number of foreclosures,



discounts, and short sales, there is no shortage of ways to find a good



deal. But be forewarned: it’s a good time to buy, but a terrible



time to sell.  If you can afford it, it’s a perfect opportunity



to buy-and-hold an investment property until the market climate warms



up to sellers.