PARAMOUNT MORTGAGE - LENDER'S BLOG

Many economists agree that the worst of the downturn is behind us as new job creation is predicted to pick up modestly in 2011. "While businesses may not be hiring a whole lot next year, they won't be firing a whole lot either," says economist Joel Naroff.

Employers will want to ensure they retain key employees as the economy recovers. Rewards of "pay hikes nearly double the going rate" as well as bonuses being handed out will increase says Catherine Hartmann, of Mercer's rewards consulting business.

So, what advice should agents give to these potential buyers, sellers or investors who enter the housing market as the new year unfolds? Amanda Gengler, Money Magazine, offers insight from the experts.

Buyers - Don't try to time the market perfectly. Even if home prices fall a bit more in your area, rising mortgage rates could offset the price drop erasing your potential savings. Not even the experts can predict daily interest rates.

Initially bid about 10% below what comparable homes have sold for over the past three years. Go lower if the area is rife with foreclosures. However, be aware of the market and listen to your agent; if well-priced homes are receiving multiple offers, bid close to the asking price. "Don't engage in a bidding war," says Mark Foreman, senior vice president at Century 21, "plenty more homes will be coming on the market."

Until your new home's keys are in hand, don't change your financial profile. Buying a car, changing jobs, or making a late payment on a loan could kill the deal. Lenders will re-pull credit reports and reconfirm jobs just before closing and they don't want to see any surprises.

Sellers - If you need to sell immediately, try to unload fast. Pricing your home right is the key. In fact, says Ellen Klein, a Rockaway, NJ realtor, "slightly under price your house. More often than not, you'll attract numerous buyers who bid up the price and you'll get a fair value in the end."

Investors - Hold off your buying plans if foreclosures have slowed in your area. "Inventory will be limited, and that will set a floor under prices," states Mark Foreman. When you are ready to make your move, "paying in cash will better the odds of a winning bid."

Here are the Homes by the Numbers according to information provided from Moody Analytics, Fiserv Case-Shiller, the Mortgage Bankers Association, and Freddie Mac.