Thursday, March 3, 2011

Five Things You Can’t Afford to Miss About the 2011 Real Estate Market!

There is no shortage of experts telling you what is happening with the current real estate market – just flip on the tube for the latest market reports, read any newspaper or magazine for a glimpse of what’s happening or log on to blogs and online experts’ take on things. But the common denominator that sets the information in this article is that these predictions are geared toward our local area.

Prediction Number 1

Entry-level home sales will dominate the marketplace. For first time homebuyers, there are some excellent loan programs out there right now; 30-year fixed interest rates and in some cases, rates that haven’t been this low in over 60 years! With entry-level home prices slashed nearly in half, the obvious expected trend is that these homes are going to fly off the listing pages and make very many new home buyers happy campers.

Prediction Number 2

Recovery is the current hot buzzword. Especially for the national real estate market. After keeping an eye on the real estate scene for the last five years now, it’s finally time to report that the markets in some areas of the country are finally recovering. Our local area, however, is still a bit behind and like many other areas in the nation we are at least 12-18 months away from recovery. Still, the two markets we’re looking at now are entry-level and high-end. First time buyers are experiencing a flat market as it lurks on the bottom of the scale. Concurrently, high-end home purchases are seeing a very soft market and we expect to see property values drop a fair amount – as much as anywhere from eight to twelve percent.

Prediction Number 3

2011 is the year of the short sale. Since lenders are wary of accepting foreclosure applications these days, the new trend seems to be heading into more and more cases where a short sale takes place. In other words, lenders are accepting less than what is owed on the property rather than go the foreclosure route. There are several reasons banks and lenders are shying away from foreclosures, including reviewing their processes and paperwork plus examining other liabilities. Not to mention that current loan modification figures show a significant number (almost half) of such loans are heading toward default. Consequently, banks and lender confidence has dropped, resulting in more short sales. Further, within the high-end market, people who availed adjustable rate mortgage financing or are about to have their loans due, are feeling the burden of their luxury homes. To ease the burden, they are going to consider short sales. For more visit the link below for more on short sales.

Short Sale FAQs.

Prediction Number 4

Cash buyers will win. At a time when banks and lenders are low on confidence seeing that the recent wave of loan modifications being defaulted on has occurred on a significant scale, cash will always be king. As is customary in home purchases, especially during an uncertain market, the bidding wars begin and at the present time cash bids on homes will be taken further – literally all the way to the bank, so to speak. Recently, there was a sale where out of four bidders on the house one was a cash offer. Though it was the lowest amount, the winning bidder was the cash bid because it would close in less than fifteen days.

Prediction Number 5

Move-up sellers and move-down sellers have an advantage! Sellers who are looking to enhance their existing level of home or those who want to scale back – are seen coming into this market at this time. Move-ups will experience the same amount of money being spent yielding a bigger and better house. Move-downs will see sellers being able to hold on to a lot more cash after the purchase.
While the national scene is generally on the road to recovery, when you focus on a certain region in particular, the trends vary. By keeping up on the predicted trends for 2011, especially for our area, you can stay ahead of the game and maybe even come out on top!