Where will the housing market go?

The housing market got a shot last Oct/Nov before the incentive package expires then lost strength after the incentive got extended. Now that the end of the second deadline is near, what will the market be?

Certainly there is some who had missed or not wanted the first incentive want to catch the ride. The question is, however, what would happen after the incentive? It seems like there is no more on the road as the Fed tries to unwind the stimulus. Immediate impact is that APR will go up, that is payment goes up. Who will take over houses from currently investing driven market given that the unemployment is holding steadily?

It is true that foreclosure is still high but had kept a lid on it, same as house values. The only thing goes up is property tax. Such correlation also occurs the high unemployment scenario. The outlook seems dark. But we have to think out side of the box, if the box is defined as "high unemployment will ruin everything".

The thinking is, "what if the unemployment drops, what will recover first and quickest?"

Unemployment, no doubt at all, will drop in the next quarter after bills passed to boosted up hiring. Questions were asked what would be after these bills expired. Simple, employment will either prevent foreclosure or encourage investments, in equity or real estate. This at least will kick off a positive tide regardless of what next. Also remember we haven't seen both investment in equity and real estate booming at the same time. These binary always flip flops between them. Given that the equity market strong recovery last year and uncertainty ahead, investors may look other options other than Treasury's and bonds such as real estate, which is definitely at the bottom now. Brave and savvy investors.

So be optimistic about the housing market. Like others, the time will come.