Buyers & Sellers Beware.

If 2007 was bad with the subprime fallout last March; well hang on to your hats for the default train of 2008! With many of the low teaser rates expiring again in March 2008, there will be hundreds of thousands of foreclosures this year. An estimated $300 billion in subprime loans is expected to substantially increase their interest rates in 2008. This is one of the first years in my 30 years of real estate experience that the positive real estate forecasters are admitting is going to be a challenge. The law of supply and demand will prevail. Homeowners in difficulty with higher house payments will offer their homes for sale at even lower prices.

In many areas, the amount of housing inventory available would take over a year to sell, at the current monthly sales ratio. With more foreclosure and short sales being added each month, the buyers don't want to tell stories of how they bought today, but should have waited until later in the year and then they may have paid 10% - 20% less. The shopper psyche may be at an all time low, since the Depression. New ...