At this time of year we typically take a moment to reflect on the year past as well as look forward to the year ahead. With that in mind, I did a bit of research using well respected real resources to predict (as best we can) what’s in store for the real estate market on a national and local basis in 2011. And the result is we can begin to see a gradual recovery and therefore feel optimistic.
Lawrence Yun, the National Association of Realtors’ chief economist, said historically high housing affordability boosts sales activity. “In addition to exceptional housing affordability conditions, steady improvements in the economy overall are helping to bring clients into the market, he said. “But further gains are needed to reach normal levels of activity.”
The Pending Home Sales Index in the Northeast increased 1.8% to 72.6% in November of 2010 which is a good sign, but it remains 6.2% below November 2009. The key thing is it is moving in the right direction which we haven’t seen in the past few years. The 30 year fixed mortgage rate is for casted to rise gradually to 5.3% by the end of 2011. unemployment should drop to 9.2%. “All the indicator trends are pointing to a gradual recovery,” said Yun. Home price prospects will vary depending largely upon local job market conditions (which is great for towns conveniently located to the Midtown Direct train line). “As we gradually work off the excess housing inventory, the supply levels will eventually come in-line with historic averages and could allow home prices to rise modestly in the range of 2 – 3% in 2012,” Yun said.