I don't usually get into predictions, but decided to share a few observations at the end of this year…
- The bottom fell out of real estate sales the last half of 2010 because so many savvy buyers ready to become homeowners shifted their purchase earlier due to the federal tax credit; sales have been fairly stable since then, just on a lower level
- Real estate is always being bought and sold because life goes on regardless of market conditions… people are born, die, marry, divorce, retire, age, relocate due to jobs or other life situations, etc… it is the 'would like to buy or sell but don't have to right now' decisions that are most influenced by external conditions, resulting in year-over-year real estate sales chart comparisons looking like spaghetti these last few years
- 2011 will bring a new wave of first-time homebuyers who will be more prepared, cautious and picky than ever because these buyers are planning to stay in their homes for a long time
- Sellers are tired of waiting for the market to 'turn around' and are accepting the new reality, with more sellers willing and prepared to take a loss, especially those who will compensate for the loss on their sale with gains on their purchase
- Both buyers and sellers have been saving up cash needed to make a change, rather than expecting their homes to provide it; homes are back to being an investment as a place to live rather than a 'cash cow'
- Many homeowners have a new-found gratitude for their homes and will stay where they are for the long haul, with a focus on family, home improvements, and building community
- Much of the stigma is gone from short sales, freeing more underwater sellers in all price ranges to detach and move on with their lives
- Median price will rise as sales shift to slightly higher price ranges, but prices for individual properties may still drop a bit as things stabilize and the market remains fairly flat in 2011
- If interest rates rise it could create more buyer urgency, but while rates may go up some I would be surprised to see big increases while unemployment remains high
2011 may be monikered the 'year of recovery', but while relief may be on the horizon it isn't quite here yet… we may see it more clearly by the end of the year, but for now we are still waiting for jobs.
2011 will again be a good year for qualified buyers… with reasonable prices, low interest rates and good selection.