(Originally published January 9, 2010.)
For many, 2009 proved to be a year of turmoil, financial hardship, change, and reinvention. The real estate industry came to a screeching halt as the US tinkered on the brink of economic depression. As the economy backed away from the precipice, many homeowners took advantage of low rates and refinanced their debt, while some home buyers began to poke their heads out and start to look for bargains.
As the economy struggles to slowly pull itself out of a recession, what will 2010 have in store for us? Hopefully, the happenings of 2009 have finally proven to us all that no one can accurately predict the future with any reliable accuracy. No one can consistently predict where the stock market, interest rates, or the weather will be six months or a year from now.
However, this year, Santa left a Crystal Ball under my tree (yes I’m Jewish – but go along with me anyway, won’t you?). You’re in luck, because I’ve taken the liberty to ask the questions that have been on all of our minds:
- Will the US economy once again see economic prosperity?
The economy goes through economic cycles. Although the actions this past fall and winter by the Federal Reserve surely prevented another Depression, Recessions, Recoveries, and Prosperities are natural progressions of the economic cycle, despite any tinkering by the current administration. 2010 will see slow and steady improvement, but no parties until 2011 or 2012.
- Will home sales increase and the real estate industry recover?
As unemployment hopefully declines, more home buyers will gain the confidence to buy new homes. Realtors will once again be able to feed themselves.
- What will interest rates do?
Interest rates can not remain at the artificially low rates we have seen recently. As the economy improves, we will see rates rise. It is likely that, by year’s end, interest rates will be 1% to 3% higher than what we are seeing today. In fact, some predict rates approaching 6% in the first quarter!
- Will the Yankees win the World Series?
My Crystal Ball was a bit cloudy on this. With their track record, though, another ring on their finger is a distinct possibility.
- What about the Mets?
Unfortunately, you don’t need a crystal ball to answer this one.
We’ll have to wait and see whether my Crystal Ball proves to be mystical or as useless as a “Magic 8-Ball.” But one thing is for certain. America will continue to be a land of capitalism and opportunity. The government won’t present good fortune to us on a silver platter. If we want 2010 to be a better year, we have to make it happen for ourselves.
Since 1992, Warren Goldberg has helped thousands of clients own their homes, refinance their mortgages, restructure their debts, and invest in real estate. Warren is known for his wide knowledge of mortgage products and wealth-creation strategies.