Real Estate Trends in 2011: What the Experts Have to Say

Investing in real estate is easier when you know what the trends are likely to be. Here’s what the experts have to say about 2011.

What is going to happen with real estate in the New Year? Is 2011 the right time to invest in a new home? Will a lot of buyers be jumping on that bandwagon?

Here’s a look at some of the biggest 2011 real estate predictions made by the experts:

• We need to focus on building new houses. Economist Brian Wesbury says that it is crucial for Americans to start re-focusing on building new homes in 2011. That isn’t necessarily what the trend is going to be because there remains a huge interest in buying foreclosure homes. Nevertheless, we’re going to create big problems for ourselves in terms of a future housing shortage if we don’t begin building new homes.
• Foreclosures are going to continue. Although it’s important for our long-term real estate health to invest in building new homes, there will continue to be a large number of foreclosed homes available for sale. In fact, as long as the unemployment rate remains low, there is a good chance that more homes will continue to be foreclosed on. This is good news for people who are looking to invest in low cost property in 2011 but obviously may be bad news for homeowners who are still struggling to make ends meet. Because of the large number of foreclosures still expected in 2011 there’s a good chance that we have not yet hit the housing market bottom in terms of low housing prices. However, any drop in home prices in 2011 will be fairly small.
• Affordable single-family homes will be most likely to sell. People who are employed will invest their money into single-family home purchases in 2011. Mortgage rates continue to be low at this time and should remain low throughout the year, which facilitates purchasing a home if you have an income and solid credit. Additionally, single-family home values are still relatively low-priced, making 2011 a year ripe for investment in this type of property.
• Large suburban homes may not be salable. There is a huge shift towards the revitalization of urban cores and away from living in large suburban houses. People want to invest in small property that is in walk-able areas. As a result, homeowners in suburbia may have a tough time selling off their property in 2011, according to FrontDoor.com.
• People who own rental properties may be in luck. Families who are looking to eventually live in larger properties are still afraid of the shaky housing market. This is due in large part to the fact that people are now looking at their first home as a fairly permanent home, seeking to stay in it ten or more years once they go ahead and make the purchase. For that reason, they will continue to rent in 2011, rather than opting to buy a large home. People who own large investment properties should be able to eke some money out of them for the time being.
• Ultimately, the real estate market in 2011 is not going to be markedly different from the 2010 real estate market. As you can see, many of the predictions that are being made for 2011 are cautious assumptions that the market may change slightly. For the most part, experts are predicting that changes will be slow and subtle and that there will be no huge surprises in 2011.

What is your biggest hope for the real estate market in 2011? What is your biggest fear?

Diane Ferraro has worked at as a San Antonio Real Estate Agent for many years. When she is not working in real estate, she loves to re-decorate her house and spend time with her daughters.