Stay closely tuned into TimandJulieHarris.com this week…..lots of housing related news happening that you will want to know about the very moment it hits.

Here is an interesting report that Goldman Sachs released earlier today.

Uncle Sam’s interventions in the housing market have pushed home prices 5% higher on a national average than they would have been otherwise, Goldman Sachs estimates in a report released late Friday.

I bet this number is actually low….students from across the US report to us how buyers are OVERPAYING for their Short Sales and REOs….

The government over the past year has slowed the pace of foreclosures through moratoria and the drive to modify mortgage terms to keep more borrowers in their homes. It also has pumped up demand for housing by giving tax credits to many first-time home buyers and by driving down mortgage interest rates.

Will the tax credit be extended? Read the news here.

As a result, home prices in some areas have risen in recent months, particularly for homes that appeal to investors and first-time buyers. Bidding wars for the more attractive bank-owned homes have become common.

We believe that even with further expected home value erosion in 2010 that homes priced below $200,000 have already experienced the bulk of their depreciation cycle.

But these artificial props won’t last forever and may have created a false bottom in the market. “The risk of renewed home-price declines remains significant,” Goldman economist Alec Phillips writes in the report, “and our working assumption is a further 5% to 10% decline by mid-2010.”

This is especially true for more expensive homes…as we reported several weeks ago…the next big surge of residential foreclosures will be homes that are more than the FHA lending limits.

Federal government policies encouraging loan mods have reduced the supply of homes on the market temporarily because it takes months for loan servicers (the firms that collect mortgage payments) to figure out which borrowers qualify. Some states have added their own restrictions on foreclosures that drag out the process further. In many cases, borrowers who get loan mods will default again within a year or so, meaning the problem has been delayed rather than solved.

Mods get a lot of bad press but, the fact remains that banks are doing loan mods. But, the borrower has to qualify. Watch the FREE Agent Loan Mod Secrets video now to learn how YOU CAN mod your own loan….and….learn how to make money from knowing how to offer loan mods to others.

That means there is a large but impossible-to-measure “shadow” inventory of homes that eventually will hit the market.

Goldman estimates the tax credit has boosted sales by 200,000 units. Congress is debating whether to extend that credit beyond Nov. 30. Goldman says it “appears likely to be extended for at least a few months but probably no longer than through the first half of 2010.”

And it appears that this will happen TOMORROW…read the report here.

Mammoth purchases of mortgage securities by the Federal Reserve appear to have held home mortgage rates about 0.30 percentage point lower than they would have been, Goldman says. Those purchases are due to be phased out in next year’s first quarter.

In March to be exact. What does this mean…? Higher interest rates and it WILL become tougher to get a loan.

The outlook for further government policy is “cloudy,” Goldman notes. But it is safe to assume that many politicians will remain loath to let the market run free and wild. Goldman points to legislation introduced by Sen. Jack Reed (D, R.I.) that would require mediation between borrowers and lenders before any foreclosures and mandate loan mods in some cases.

“At a minimum, the Reed proposal would slow the foreclosure process considerably,” helping to prevent price declines in the near term, Goldman says. It adds: “The tradeoff would come later, when many of the properties eventually make their way back onto the market through foreclosure.”

Agents, what does all of this mean to you? Simple, this is the new market. Learn how to help others and make money because of this market. The agents who are thriving NOW are the agents who have learned how to become REO Listing Agents. Know this…its not too late for you. Watch the FREE Agent REO Secrets video and then download the FREE Agent REO Secrets book.

Source: WSJ.com

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