2011 Housing Market Forecast
Reflecting back on 2010, the first part of the year was primarily fueled by the $8,000 tax credit. Once the tax credit expired, which was heavily influenced by a lack of consumer confidence, (even with rates dipping down to 3.875 percent), the market became stagnant. The question then becomes “What can we expect this year for 2011?” Well, we are already three months into the new year and no one can really say for sure what is on the real estate horizon. Some areas are seeing stabilization of home prices, even though our unemployment rates remain high. Foreclosure activity will continue to increase based on the number of Americans that continue to find themselves underwater on their mortgages. More than 380,000 new foreclosures occurred in the fourth quarter of 2010. This makes the number of in-process foreclosures close to 1.2 million nationally, a 10 percent increase over 2009. With more foreclosures entering the market, it will adversely affect an industry recovery. Many analysts don’t see a recovery until at least 2013.
While this real estate scenario may seem bleak, keep in mind that the real estate market is cyclical and values will eventually stabilize and bounce back into a more healthier cycle. If there ever was an opportunity to buy a home, this is it. Interest rates are incredible low and homes can be purchased with as little as 3.5% down . Yes we live in trying times, but this too is cyclical. If you have the determination and desire to be a home owner, this is the time to act. Don’t let fear prevent you from achieving the American dream of home ownership.