If you are looking for a larger home for your growing family or are interested in purchasing real estate for business purposes, you are probably thinking about making a purchase or two in the upcoming year. This brings to question whether the current economic storm is perfect for real estate investments, or not.

It’s true that prices are low right now, but you still have to seriously question whether it is the right time to take on this type of investment for you personally. One thing is for certain, there are guaranteed to be big chances in the real estate market in 2010.

On one hand, this is the perfect time to make a purchase since the value and selling price of homes is set to rise in the future. This means you can buy a new home for your family without its value dropping a short while later. This also means you can pick up a cheap rental house and make higher profits in time, or buy cheap prices to flip for substantial profits.

Our job market has not picked up yet and the foreclosure crisis continues to take homes from many American families. It is estimated that about 1 in every 4 homeowners owe more to their mortgage than their home is even worth. You can guarantee that many more homes will be hitting the foreclosure market in the year to come.

Another factor in the foreclosure crisis has been adjustable rate mortgages, which can easily double house payments on families that can barely afford their current payment. In the coming year many of these adjustable loans will reset, forcing yet even more families out of their homes.

In March, 2010 we will also see the expiration of a federal program which has kept mortgage rates rather low. This program allowed the federal government to buy mortgage backed securities and debt from Fannie Mae and Freddie Mac, but when it expires you can expect to see mortgage rates on the rise. This could mean a hike from 4% up to 6% before the end of the year.

The Department of Housing and Urban Development (HUD) is also considering some other big changes for the real estate market in the upcoming year which might make securing real estate more difficult in the future. For instance, the required credit score could be much higher, you may be required to put down a substantially larger down payment, and insurance premiums could skyrocket.

The government is currently offering a tax break to get more buyers into the market. If a buyer purchases their first home by the end of June they will qualify for tax breaks of up to $8,000. If a homeowner purchases a second property, they will be entitled to a tax credit of up to $6500. While this may be most tempting for new homeowners, you should be prepared to make sure you can still afford a mortgage and have a steady source of income.

It is important to keep all of this in mind if you do purchase real estate in the upcoming year, but also be prepared for whatever may happen with the economy. Make sure that you are financially secure and that you can handle whatever changes may be coming in the next year as the economy fits to normalize once again.

Karen Lissack has been writing about real estate and home related topics for almost 15 years. She is proficient in any aspect in real estate from buying to selling, even investing. She is fully informed about chapel hill real estate and has aided people in finding the best chapel hill homes the market can offer.