As we bid 2010 farewell, and some might say good riddance, let’s keep looking forward and thinking about what’s in store for 2011. While I don’t believe 2011 will bring us back to any sense of “normalcy” in the real estate market, I do think we’ll begin to see a slow and steady climb back towards a more stable and positive market. So get your hiking boots on…
That said, let’s take a look at a few things I think we’ll see this year, in the Jacksonville market, and beyond.
- Mortgage rates will continue to rise
We’ve seen some of the lowest rates in history over the last year. It only makes sense that rates will start edging up again. However, even if rates climb to at/above 5%, that’s still well below the average of 7% we saw before the bubble burst.
- Prices will continue to fluctuate
Numerous factors will impact home prices throughout the year, including mortgage rates, builder inventory, distressed properties and local market factors (unemployment rates, etc.). Here in Jacksonville, where we’ve already seen a pretty significant drop in values, we should begin to bump our way along the bottom with an eye toward a turnaround. For sellers, this means pricing it right from day one on the market if you really want to sell your home. For buyers, that means being ready to pay what fair market value is for the property. DO NOT expect a crazy 50% off deal on everything you tour with your realtor. There are some great deals out there right now for sure – and those will continue to pop up – but, there are also some great homes that are fairly priced and not distressed sales. Those too should be given a fair look.
- Distressed properties, especially foreclosures, will continue to dominate the market
Short sales and foreclosures made up a large percentage of the market in 2010. In 2011, it’s likely we’ll see a pretty significant uptick in the number of foreclosures on the market. Banks have been holding back their foreclosed inventory to avoid flooding the market but banks will likely begin releasing their stockpiles of repossessed homes to the market. For sellers, that means that the first quarter of 2011 may be the very best time for getting your home on the market and sold before a foreclosure glut drives prices down even more.
- Sellers will continue to chase the market
Price reductions will continue to be a staple of the home seller’s tool kit. In 2010, Jacksonville was among the markets with the most price reductions. This trend will likely continue in 2011 as we grapple with more foreclosure and builder inventory, as well as an uncertain job market.
- Affordability will continue to be the silver lining
With prices and rates at all time lows, 2011—just like 2010—will be a great time to buy a home. In many markets, Jacksonville included, it may make more sense to buy, in fact, than to rent. And if you’re looking to upgrade or upsize, or find a second/vacation home, now is the time! In Jacksonville, for example, buyers may finally be able to afford a home in one of Ponte Vedra Beach’s desirable neighborhoods, a condo in Jacksonville Beach, or maybe even oceanfront property on A1A. Whatever your dream home is, it’s probably never been as affordable as it is right now.
Whatever you’re hoping for in the New Year, I hope you achieve it. Best wishes for a healthy and happy 2011.