Predictions For Housing Market In 2011

This year could be a rough year for the housing market, due to unforeseen changes to our country’s economic fortunes. Currently, there is a neverending number of unsold homes in this country. There is little demand for these properties. Simple economics indicates that real estate values must decline unless there is a random immigration of wealthy immigrants or we demolish a significant amount of the current unsold houses (which would be a historically stupid waste of supplies). According to the S&P, as of the end of the third quarter, the principal value of foreclosed mortgages totaled $450 billion. Although this this is $10 billion less than the $460 billion in quarter number two, the rate with which the market is picking up these homes is diminishing. With this pace, it will take almost four years for the housing market to consume all these homes, up from forty months in quarter number two. House prices are down roughly 20-25% from their peak in 2006. Since home values were momentarily buoyed by the first time home buyer credits, started falling when the programs ran out in the spring. Housing prices have been falling in several regions for many months now. The kind people at Zillow are not any more confident than the individuals at Standard and Poor’s. Stan Humphries, Zillow’s Chief Economist asserted: “The back half of 2010 looked horrible and 2011 should look like the mirror image of that”. He is not painting an optimistic portrait. Maybe you don’t believe Case-Shiller/S&P or Zillow. But how do you feel about the predictions of real estate and media mogul Mort Zuckerman? According to him, the excess of distressed homes will “put downward pressure on residential prices” and “that’s going to continue for several years”. Refinance your home loan now. By this point you understand what I’m trying to say. If you are capable of finding this, you have your own google machine, and are capable of finding vast amounts of writers who are predicting a unrelenting decline in housing values, an all-out double dip, or maybe even both. One may find a small amount of people who assert that the housing market is going to improve this year. Usually these people have a very definitive motive, and I wouldn’t take their imput without a grain of salt. Although contrarian thinking makes for good entertainment, I really cannot see any change besides continual decreases in property values next year (on average – some areas will fare better than others). What do you think will happen to the housing market in 2011? Perhaps you’ve discovered a key point that I have not? Voice your thoughts in the comments section below.