After a tough 2009, we had high hopes for the real estate market in 2010. Thinking that conditions couldn't get much worse, many believed that home values would start the process of recovery but instead it was largely more of the same. Let's take a look at five of the most important real estate stories of 2010.

IN PICTURES: 5 Simple Ways To Invest In Real Estate

Robo-Signing
Probably the biggest news story of 2010 regarding real estate was the robo-signing scandal. A small home in New England became the center of the controversy when it was revealed that a small home in foreclosure had documents which were signed by somebody unfamiliar with the case, a practice that is illegal in most states. These signers were later called robo-signers because of the large amount of documents they were signing each day. This caught the attention of all 50 state attorney generals, which caused a brief stoppage of foreclosures by the largest banks. (To learn more, see the Top 5 Things To Know About Robo-Signers.)

What some believed would be a major controversy that could cause large scale financial damage to the already beaten down banks has largely become a non-issue as banks settle the robo-signing lawsuits for a relatively small amount of money.

See-Sawing Mortgage Rates
This past year saw the lowest mortgage rates in more than 50 years. In November, the average interest rate on the 30-year fixed mortgage was 4.17%, down more than 1% in less than one year. Then, in just over one month, the rate jumped up to 4.83% by the end of December. This increase was theoretically stiffened by the Federal Reserve purchasing billions of dollars in bonds, known as quantitative easing, thus increasing the cash banks hold. Although many investment vehicles have a history of wild swings up and down, mortgage rates don't often move as quickly and violently as they did in 2010. (Learn more in What Is Quantitative Easing?)

Unemployment
The low mortgage rates dropped to levels that allowed many who couldn't otherwise afford a home to purchase one - but did that fuel a buying spree? Sadly, it didn't, and most economists and real estate experts blame the nearly 10% unemployment rate for the lack of buying interest in the many homes on the market.

IN PICTURES: 5 Mistakes That Make House Flipping A Flop

Jingle Mail
2009 was a terrible year for "jingle mail," those people who sent the keys to their home to their mortgage company and walked away; 2010 saw very little improvement. In an MSNBC survey, 48% of those polled said that they would consider walking away from their mortgage responsibilities. With more adjustable rate mortgages (ARMs) scheduled to reset, adding as much as $1,000 to homeowners' payments, it's likely that some of the 48% polled may actually drop those keys in the mail in 2011.

Nicholas Cage
Nicholas Cage, who is famous for his film roles and as an international real estate investor, found himself in the tabloids when many of his properties were sold for a substantial loss by his business manager, seized by the bank or foreclosed upon. Although most of us can't identify with multi-million dollar properties all over the world, we can identify with one key rule: any investment must be seen as something that could both appreciate in value as well as rapidly drop. Unfortunately Nicholas Cage learned that lesson the hard way. (Check out 10 Habits Of Highly Effective Real Estate Investors.)

The Bottom Line
Real estate in 2010 will not go down as a bright year for home owners. Many are still hurting and as we look forward to 2011, let's hope that businesses begin hiring again so the housing crisis that still grips the United States will see brighter days next year.

For the latest financial news, see Water Cooler Finance: Canadian Takeover And U.S. Tax Breaks.

Related Articles
  1. Economics

    Explaining the Participation Rate

    The participation rate is the percentage of civilians who are either employed or unemployed and looking for a job.
  2. Economics

    What Qualifies as Full Employment?

    Full employment is an economic term describing a situation where all available labor resources are being utilized to their highest extent.
  3. Technical Indicators

    Using Moving Averages To Trade The Volatility Index (VIX)

    VIX moving averages smooth out the natural choppiness of the indicator, letting traders and market timers access reliable sentiment and volatility data.
  4. Investing News

    The Brief: Where Is the Bottom?

    Where is the market going today after yesterday's bumpy ride?
  5. Professionals

    Tips for Helping Clients Though Market Corrections

    When the stock market sees a steep drop, clients are bound to get anxious. Here are some tips for talking them off the ledge.
  6. Investing

    Finding Value in the Selloff Rubble

    Globally and in the United States, stocks are now in correction mode, with the recent erosion in equities in emerging markets and Europe in a bear market.
  7. Investing Basics

    6 Smart Strategies to Invest Your Extra Cash Now

    The world's stock markets are shaky, to say the least. Should you hold onto your cash or bargain hunt?
  8. Professionals

    Holding Out for Capital Gains Could Be a Mistake

    Holding stocks for the sole purpose of avoiding short-term capital gains taxes may be a mistake, especially if all the signs say get out.
  9. Economics

    Understanding Frictional Unemployment

    Frictional unemployment is one aspect of natural unemployment, which is unemployment caused by things other than an underperforming economy.
  10. Investing

    Predictions For The Stock Market

    Learn different choices and strategies that can be used to create a profit regardless of what direction the market is going.
RELATED TERMS
  1. Bear Closing

    Purchasing a security, currency, or commodity in order to close ...
  2. Maximum Drawdown (MDD)

    The maximum loss from a peak to a trough of a portfolio, before ...
  3. Bear Fund

    A mutual fund designed to provide higher returns when the market ...
  4. Graveyard Market

    A prolonged bear market where existing investors want to get ...
  5. Pain Trade

    The tendency of markets to deliver the maximum amount of punishment ...
  6. Bear Tack

    A decline in the price of a stock, sector or market that may ...
RELATED FAQS
  1. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  2. How can I hedge my portfolio to protect from a decline in the food and beverage sector?

    The food and beverage sector exhibits greater volatility than the broader market and tends to suffer larger-than-average ... Read Full Answer >>
  3. How attractive is the food and beverage sector for a growth investor?

    The food and beverage sector is attractive for a growth investor. The sector's high degree of volatility means it tends to ... Read Full Answer >>
  4. What techniques are most useful for hedging exposure to the insurance sector?

    Investing style determines the best hedging techniques for the insurance sector. This sector comprises three segments, two ... Read Full Answer >>
  5. What is the formula for calculating the receivables turnover ratio?

    To calculate a company's accounts receivable turnover ratio, start with the net receivable sales for a given time period, ... Read Full Answer >>
  6. How can I hedge my portfolio to protect from a decline in the retail sector?

    The retail sector provides growth investors with a great opportunity for better-than-average gains during periods of market ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!