10 Predictions for 2010
With the closing of one year and the start of the next I thought I would take some time and jot down some predictions for 2010. I want to do this for a couple of reasons. First it allows me to shares my thoughts on the next 12 months with a lot of people who can point out my errors. Second it allows me to look back in 6 or 12 months and evaluate how I did reading all the tea leaves of real estate investing
1) We will see the peak in residential foreclosure in 2010
2) The Case-Shiller Index will turn negative and continue negative until July or August which will prove to be the bottom people have been looking for
3) Duplexes – Quads will prove to be great buys in 2010 assuming you can get financing as banks will want to dump these as rents continue to get soft and loan quality continues to get worse
4) Great Long Term Holds can be purchase in 2010
5) Rents stay soft for all of 2010 (But 2011 will see this turn around)
6) Small Commercial apartments 5-40 units start to foreclose in greater numbers providing excellent buys late in the year
7) Government extends the first time buyer program at least 1 more time as real estate stays soft through Q1
8) The Fed stays on hold all year and does not raise rates in 2010
9) Stock market (Dow) will retest 7,500 before June 2010
10) Home building industry consolidates to remove capacity from the system as new housing starts stays weak throughout 2010 as we burn through the foreclosures
As always let me know what you think.
Good Investing in 2010
Comments (8)
Hope you're right about small multifamily and commercial!
Charles Burton, about 15 years ago
Great predictions, Michael . . . like the rest of the guys, I'm pretty much in agreement with all points here. Time to Tweet it!
Joshua Dorkin, about 15 years ago
"4)Great Long Term Holds can be purchased in 2010 9) Stock market (Dow) will retest 7,500 before June 2010" ....agreed, I believe money invested in real estate now (for those that due their due diligence) will overwhelmingly out-perform monies invested in the stock market.
Ted Harris, about 15 years ago
Sounds about what I've been seeing for the near future...except #10. #10 New Home starts - We will see new home building permits ramp up in 2010. (...some what) In some markets we are seeing the supply of new homes dipping under a 3 mth supply. This is triggering your smaller builders to inch back into the market and pursue private funding and pull new permits. The larger builders will have to survive their financial woes and excessive land holdings before they get too serious. I'm not suggesting a return to 2006/2007 highs, only an uptick that may or may not be a 'green shoot' for the economy's recovery. Thanks Michael for your thoughts.
Kyle King, about 15 years ago
Nope, the market can act irrational (go higher) a lot longer than I can stay liquid (Feed my short position) I chose instead to play (use my cash) in the market (Real Estate) that I know best .. Keep buying REO's for close to land value I don't care if it takes 10 years for the property to go back to replacement cost but I am convinced they have to eventually ... Good Investing
Michael Zuber, about 15 years ago
Are you guys shorting the stock market? I'm long, but a lot of cash and international equities (funds).
Jon Klaus, about 15 years ago
Thanks Peter, Good luck in 2010 (And as your latest post says, Write down your goals and just freakin do it :-) Thanks
Michael Zuber, about 15 years ago
Michael... well said. I agree with everything you see coming... especially the DOW. As one "expert" investor said... the DOW is on a sugar high right now. Interesting times continue.
Peter Giardini, about 15 years ago