From Dan Elsea
December Pending Sales were at a relatively strong pace, giving us more market momentum going into 2011 than we had into 2010. Overall we are seeing what appears to be a trend towards a stable market in terms of inventory levels and sales pace. It is also a reasonable window into what we can expect in 2011, an active buyer market with sales near 2010 levels (possibly slightly lower without the tax credit help of 2010). The months supply of inventory (MSI) is still running over 6 months, putting the market on the Buyers side, however it dips closer to 5 months in the under $100,000 range, but still over 24 months in the over $500,000 range. Which means price appreciation is still a year away for the lower priced areas and more for the higher priced markets. So should buyers wait? As we have said may times, it is pretty clear we have hit the market bottom, and although appreciation won't be taking off soon, interest rates will certainly rise, as they have already. A 1% rise in rates wipes any savings from a 10% price drop and it is far more likely that interest rates will rise by 1% than values will fall by 10%. Also, with an FHA loan, buyers will lock in a low interest rate that is assumable when they sell their home. In five years, a 4.75% rate will make your home more saleable when the rates are at 6.5%.
Also, keep in mind that there are thousands of former homeowners, who were forced to sell and now lease and whose credit is now repaired and ready to take the homeownership plunge. In the most recent NAR surveys, the vast majority of people who lost their homes due to financial hardship are still looking to own another home first chance they get.
2010 was the fifth year of our “new normal”, where most sales required 2-3 negotiations (to the buyer, the appraiser, the lender) and considerably more time. We worked extra hard, but there has not been a time when we have been needed more by our clients. Through it all you closed more transactions than ever before in our 81 year history!! We are one of only five brokers among the Real Trends 500 to show an increase in sales associate productivity! You worked hard for your clients and it showed in our collective success rates.
Thank you for a great 2010 and an even stronger 2011
Here is how the market shook out this year:
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Saturday, January 29, 2011
2010 Year End Real Estate Market Update
Posted by Suzanne OBrien at 8:51 AM
Labels: 2011 Expert Advice, Business Plan, Detroit Area Home Sales, Michigan Realtors, Real Estate, Real Estate Coaching, Real Estate Investing, Real estate news, Real Estate Trends, Realtor Training, Success
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