Market predictions are everywhere. Don’t get me wrong, they definitely have their place. But the standard market predictions in real estate have been made much tougher for real estate pros and writers alike by all of the governmental toying.

I’m not complaining — my phone definitely rang more after the announcement of the 2009 tax credit for homebuyers.

My point is just that all the government stimulus past, present and future (and the inevitable expiration thereof at some point in time) makes it tough to call exactly how this whole thing will shake out.

But what we can predict are people, and human behavior.

2009 was the year of big, obvious behavioral-economics trends, especially in the real estate world. Here’s where I think they’ll go in 2010:

1. Sellers will be more realistic about pricing. The National Association of Realtors’ 2009 Profile of Home Buyers and Sellers revealed that the average seller accepted a final purchase price around 95 percent of asking. About 60 percent said they had reduced their home’s price at least once.

Sellers who require top dollar are likely to stay put this year, and those who decide to sell will see the carnage from recent years past and list at more realistic prices and/or more readily agree to price reductions.

2. Buyers will make more holistic, organic and sustainable home and mortgage decisions. Recent studies have shown that things like commute distance, proximity to extended family and "walkability" to desirable amenities have been shooting up the ladder of homebuyer priorities of late. More buyers than ever will buy below their maximum approved price.

In 2009, only 18 percent of homes sold were new homes. Older homes in stroll-and-shop districts will continue to be popular, as money-conscious buyers will continue to make sacrifices of vacations and luxury items to own and still be able to put money away.

Buyers will continue to buy older homes and remodel the homes themselves — about 25 percent of homeowners in general did some do-it-yourself home repairs and remodeling in 2009, and this trend isn’t going anywhere. Loads of buyers will use their tax credit to fund post-closing sprees at Lowe’s and Home Depot.

Buyers are looking at the impact of every facet of their prospective new homes on every element of their current and envisioned lives, rather than just falling for the biggest-and-best they can afford.

They will be more willing than in any other time in the recent past to wait for their finances to grow before moving up to a larger home and the correspondingly larger monthly mortgage payment.

3. Everyone will reevaluate the inherent desirability of home ownership. The days in which owning a home was an unquestioned component of The American Dream are over. With sellers, we’ll continue to see many strategic walkaways as loan modification programs fail to galvanize lenders to modify the masses of struggling homeowners and short sales continue to be, er, complicated.

Also, many homeowners are questioning the value of a strong credit score in an market where even those with great FICOs can’t get credit at a decent rate — this will contribute to some owners’ willingness to release their attachment to their upside-down homes.

Others, though, will come out on the opposite end of this issue. The DIY spirit of the New Economy will cause an increasing number of sellers to seek out education about bankruptcy alternatives and declare bankruptcy to get rid of equity lines and manage their credit card debt so they can save their homes.

Buyers are not immune — they will be much more conflicted than ever before about whether homeownership is something they want in their lives. They will deeply consider the issue before buying.

But those who decide they do want to own will not be deterred by the market’s volatility, the multiple offers, the run-down bank-owned properties, or anything else.

According to the NAR report profiling homebuyers and sellers, 62 percent of first-time homebuyers participating in the survey said their primary reason for buying was the simple, deep "desire to own a home."

4. Everyone will take more personal responsibility for their real estate lives. Buyers will come to their mortgage counseling sessions with their own household spending plans in place. They will have learned by now that they should be telling their mortgage professional what they can afford, not vice versa.

Homeowners will wade through books and Web sites on loan modification and bankruptcy, will obsessively check interest rates and nearby home sales data online, and will even take a more proactive role in marketing their homes via YouTube and social networking sites like Facebook.

They’ll take home improvement classes instead of just calling the handyman. And they’ll do all of this while cooking at home for friends — in a nod to frugality — and to save up for the occasional splurge to satisfy the two years’ worth of pent-up urges to spend. In this way, 2010 will give new meaning to the term ‘balanced budget’ (the old meaning sure won’t be needed next year!).

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site,


What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

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