Most real estate pundits have changed their forecasts for any significant improvement in the real estate industry from 2009 to 2010 or even 2011. The hoped for trend would be:

• 2009 – prices stabilize by mid-year
• 2010 – foreclosures begin to dwindle
• 2011 – real estate appreciation returns

What does this mean to homeowners?

If you think you will need to sell in the next 18 to 24 months, you need to consider selling now. The better bet is that the value of your home is going to decrease NOT increase or remain flat. Projected declines range from a few percent to as much as another 10% to 15% of your homes value.

Real estate is always local. There are significant differences in what is happening with home values in East Bay communities and among different price points. That’s why these market reports are so valuable. They are updated weekly and break the data down by zip code and price point.

What does this mean to buyers?

The two more significant points for making a decision to buy are interest rates and quality of life – not price. Price declines over the next year may not affect your monthly payment as much as interest rates. Getting a great interest rate on your mortgage can be worth more than a 5% savings on price.

If you find the perfect home, buy it. Many people waste their lives and miss out on good deals and opportunity by obsessing on getting the “rock bottom” deal. Few people actually get such a deal while tens of thousands look back in hindsight wishing they had taken advantage of the missed opportunity.

What does this mean to investors?

Great opportunities for investing in East Bay real estate are going to continue for the next 18 months. Home owners going into foreclosure are “hopscotching” into leases that were foreclosures a month earlier. These home owners are basically paying in rent what their mortgage payment was before their ARM reset. Rents in the East Bay are rising in most locales.

My Personal Rant

The big question for all of us is the U.S. economy. Will it collapse from the actions of the greedmongers and self-serving ignoramuses? Has all the conniving and sleight-of-hand been uncovered or are we in for more surprises? Will the government finally do what is right for the average citizen or will it be another case of taking care of our friends and bailing out the perpetrators at the expense of the average citizen.

The current bail out plan is sticking it to the average citizen on both ends. Not only are WE going to pay the bill, our retirement plans are being decimated as the government writes off whole institutions without allowing them to go through bankruptcy and sell assets to reclaim some shareholder value.

It seems Wall Street was more fact than fiction and there were many, many more Gordon Gekkos out there than we thought.