This afternoon I attended a very informative lunch meeting organized by C & F Mortgage in Waldorf. The information provided was very current to our market place, but most of all, insightful as to where the transactions of buying and selling a home are headed in the near future.

We have already seen a record number of banks fail this past month, and it has been predicted that even more banks will go by the way side.  Interest rates will go up as a result of the Government having stopped buying Mortgage Backed Securities at the end of last year, and the oversupply of debt. Also there is every indication that taxes will continue to rise. It was suggested the rates will rise to 6% and 7%.

Many more foreclosures are coming. The percentage of defaults currently have largely been sub-prime. In 2010 we will begin to see more prime mortgage defaults leading to Foreclosure.

Appraisal guidelines and loan program restrictions will become even tighter, and continue to force home values down. 

Nationally,the months of June and July have shown signs of a strengthening real estate market, while locally we remain down about 10% to last year.

It was also suggested that Fannie Mae and Freddie Mac will close up shop.

The current $8000 tax credit ends on November 30, 2009. While there are proposals in Congress to extend the tax credit and even increase it, without any further intervention, the real estate market will become more difficult for both buyers and sellers, and remain so for several years to come.