With the new year just around the corner I'm getting more and more questions about what I predict the market will do in the coming year.

I suspect the worst of the housing market is past us and the huge price drops we've seen in 2008 and 2009 are a thing of the past. Short sales will likely continue to rise as more homeowners are trying to save their credit by avoiding foreclosure. I wouldn't be surprised to see the government step in and pass legislation that requires banks to make drastic changes to their short sale processes which will streamline the loan modification, short sale, and perhaps even the foreclosure process for homeowners in distress. Those same banks may also begin holding on to more foreclosed properties and "flipping" them themselves to avoid the huge financial losses associated with foreclosing on a property and auctions.

Mortgage rates will most likely spike in March when the government puts an end to mortgage-backed securities. I expect that change will cause rates rates to go from the current 5% mark to around a 6% prime. The refinancing of properties will slow down en suite as the rates being offered will no longer be a substantial improvement for the majority of homeowners. Lenders will likely require significantly better credit scores to qualify for financing. My presage is that FICO scores will probably need to be around 700 for most  lending institutions.

Our local luxury markets will probably see less activity by potential sellers as more homeowners stay put waiting for the market to recover due to the higher mortgage rates compounding their losses. This will effectively cause a market stabilization because the decreased inventory in the Longboat Key and Sarasota communities will leave the buyers with less to choose from and in essence allow sellers to demand higher prices as the competition becomes more sparse.

If you have any questions about buying or selling in the 2010 real estate climate feel free to contact me and I'll be more than happy to speak with you at length about the opportunities available.