subject: Real estate in 2010 [print this page] Real estate in 2010 Real estate in 2010
As the year 2010 comes to a close most people in the housing industry are happy to see it go. 2010 was perhaps one of the hardest years in the real estate market in recent history and most are glad it is over. Market watchers believe that 2011 will be much the same in the beginning of the year. However, they believe that as interest rates begin to inch upwards again potential buyers will begin to seek homes.
100 economists were recently surveyed about potential home price increases over the next two years. All agreed that there will be a very slight increase in home values in 2011. Most stated that it will be less than 1%. The good news to that scenario is simple: the prices will increase.
During 2010 home prices continued to fall in all but 7 of the 50 states. Washington D.C. home prices rose at a steady rate due to the increase in government jobs in the area. Other places in the country, such as Michigan, continued to see large drops in the home prices.
These same economists believe that the bottom has finally been reached in the market and now the only way is up.
The beginning of 2010 saw an increase in home sales, but that was due largely to the tax credit that was being issued to first time home buyers. Once the program ended in June there was a steep decline in purchases. While it was a step in the wrong direction for the housing market, it allowed the market to come to its official low. Using tax credits may have helped some home buyers, but it created an artificial atmosphere in the housing market.
Projections for 2011 are that approximately 5 million homes will be sold over the course of the year. This is a small projection, one that matched the figures from the year 2000, but it is higher than the projection for 2010. With an increased population in 2011, nearly 30 million more people in the country, it is hoped that real estate purchases will exceed these predictions.
The stubborn unemployment figures and stagnant payrolls are contributing to the low home sales. Employees that have watched their pay rate remain the same, while everything continues to rise, have been reluctant to make any new purchases until they see more stability in their workplace and in the nation. Record low interest rates, thought to encourage people to buy, have not had the effect hoped for by the Fed. However, it is believed once interest rates begin to increase, people will move quickly to secure the low rates.
Realtors believe that this is a mistake. At a recent convention in New Orleans, realtors from all over the country introduced figures showing how low mortgage payments currently are running. Compared to a year ago, places like San Diego and Miami have seen their monthly mortgage payments drop by 50-60%. This alone, they believe, should encourage people to begin to buy homes.
The current market has an excess of foreclosure properties available, over an eight month supply. In addition, many homes available on the market are short sales which do not fall under the foreclosure category. Realtors are not sure if this is going to damage a recovery next year or actually increase its chances. More foreclosures are expected to hit the market in January and February as lenders resume filing foreclosures after a self-imposed moratorium needed to clear up the robo-signing scandal.
Overall, real estate is expected to begin to rise in 2011 and begin gaining momentum by the end of 2012. As the economy stabilizes, job growth is noticeable and people feel secure owning a home again, the values of homes across the nation will begin to grow.
