Feb. 22, 2010.. Real Estate Values Up/down?

After seeing some more comforting data regarding real estate, the question is what is the direction for 2010. Several writers have mentioned 3 of the following developments. 1). the Federal Reserve ending their program of buying mortgage back securities after the 1st quarter. Currently, the Federal Reserve is supplying the lion's share of funds for mortgages. If they withdraw (as they have said they will), private sector money would need to replace the Fed's portion and most likely, the private sector will demand higher rates of interest.. Thus we could very well see interest rates rise from the very attractive levels currently. 2). Government sponsored programs such as 1st Time Buyer Tax Credit and Move up buyer tax credit will end shortly. Will buyers demand that sellers, in essence, provide these incentives by way of price drops. 3). Shadow inventory refers to the millions (5-7 millions) of foreclosed and soon to be foreclosed homes. This additional inventory would once again affect prices and the market was just making some head way with this issue. Home inventories were stabilizing to some extent. The foreclosure homes could push the market backwards and hurt prices again.. The effect of all these items could be a 2nd round of price drops.