With 2010 coming to a close, the “experts” are out in full force, making predictions for next year’s housing and mortgage markets on business television and in the papers.
Predictions for 2011 are wide-ranging:
- Some say home prices will rise in 2011
- Some say home prices will fall in 2011
- Some say mortgage rates will rise in 2011
- Some say mortgage rates will fall in 2011
The problem with housing and mortgage predictions is that — like all predictions — they’re just educated guesses about the future. Nobody knows what will really happen with the housing and mortgage markets in 2011. All anyone can do is theorize. As laypersons, though, it can be hard to separate theory from fact.
Television can make that task even more difficult at times.
As an example, when a well-dressed economist goes on CNBC and presents a clear, succinct argument for why home prices will fall on 2011, we’re inclined to believe the analysis and conclusion. After all, the outcome seems plausible outcome given the facts. But then, immediately after, a different economist presents an opposite argument — that home prices will rise in 2011 – and her analysis seems sound, too.
Even Freddie Mac can’t see the future.
Last year, the government group predicted mortgage rates to 6 percent in 2010. That never happened, of course. Instead, conforming mortgage rates dropped over a 7-month period this year to levels best be described as “historic”. Freddie Mac couldn’t have been more wrong.
So, what’s a homeowner to believe?
About the only thing that’s certain right now is that mortgage rates remain low by historical standards, and that home prices do, too. Also, that both housing and mortgage markets appear to be riding momentum higher into 2011. This suggests that it will be more expensive to buy and finance a home by the end of 2011.
Until that time, however, predictions are just guesses.
(Article above posted on several blogs and websites as of 12/29/10— original source unknown)
In my opinion; after the roller coaster rides of 2008 through 2010 (government intervention impacted supply and demand)- we will see 2011 still riddled with foreclosures however the market did hit a second bottom locally 10/10/10 according to The Cromford Report (first one was 4/6/09).
I personally expect it to remain relatively flat since I am currently selling homes at or below pricing of when I started in the Real Estate business nearly 18 years ago- there just isn’t much more lower it can go and as the economy in general recovers, prices will slowly increase- that is for certain! (That’s just an educated guess based on the article above- lol )
With that said; many buyers have sat on the fence waiting to see what will happen next year before they do anything. Unfortunately we won’t know for sure when we’ve started a permanent “recovery” until after prices do increase, meaning those waiting for certain indications will actually miss the bottom and purchase when the prices have already increased. There are a lot of great “deals” out there TODAY when one really looks, they’ll come to the conclusion that it’s a great time to invest or “move up” into that home one could not have afforded 5 years ago. There’s also something to be said for the enjoyment your own home brings and pride of ownership.
For Sellers who are upside down and either purchased or refi’d in years 2004-2008; unless the banks actually start reducing principal balances on debts owed- a strong consideration should be made with regards to doing a short sale today in order to get out from under that house. If the market ever returns to the record high in 2005, it’s unlikely it’ll be anytime soon. Most likely, it will be several years down the road before those homes could ever be worth the same values again that we saw before. Why keep throwing “bad” money in after “bad” money in the meantime? If you haven’t gotten behind in your payments yet, we’ve helped clients successfully sell short and immediately repurchase today (it’s actually possible to do a short sale and not damage your credit, just ask us how!).
For Buyers; Rates are still in the 5’s and prices at record lows; you cannot go wrong with purchasing a home today if you can qualify for a mortgage loan OR have cash on hand (calling all investors)! For current renters; it’s a no brainer- with the tax advantage of home ownership and the net effective house payment vs. rent comparison- renters can live in much nicer homes today for the same or less money monthly than they can renting. Click here to read more…
Click here to get started OR call 480-243-4242 and we will gladly help you navigate through all of this confusion and help you achieve your and your family’s Real Estate GOALS for 2011- just let us know what you need and we’ll be there for you, your family and/or friends! We are never too busy for your referrals and greatly appreciate our past clients passing the word about us on to others.