Real Estate Predictions for 2011

Well it’s going to be a question of good news and bad news, depending Seller Contingencies Real Estate on which side of the fence you stand: buyer or seller.
If you are a seller, I expect that prices in the Phoenix metropolitan area will remain flat, with a possibility of some areas losing another 10% in value. This is because we are not done with distressed properties. In fact, Bank of America’s recent moratorium on foreclosures, since expired, only served to kick that can down the road. Add in the fact that the state of Arizona is suing them, and you can deduce that 2011 will also be a rocky year.
At this point I must add, and I have said this before, that the banks are also their own worst enemy. Their languid responses to short sales, (anywhere from two to twelve months) is costing sales and delaying the possibility of a return to a normal market; whatever that will mean in the future. Their utter disdain for the conventions and customs of the real estate market is certainly not winning them any friends among the ranks How To Sell A House By Owner Paperwork of real estate professionals. So, keep offering insulting commission rates for what are arguably more difficult transactions and see the caliber of agent you will attract. Keep insisting that potential buyers MUST pre-qualify with your Aunt’s second cousin at Billy-Bob’s Ammo, Pizza and Mortgage Emporium. Let me know how it all works out for you. Many real estate pros have long memories so your future will not be bright.
I think the main problem with the banks, due to their corporate culture, is that few of the people tasked to approve a short sale have the stones to actually sign off on that loss. Too often they are scrambling for excuses to kick it upstairs, or off to another lackey, so as to avoid responsibility for any decision-making. This further exacerbates the problem.
On the positive side, it won’t be a bad year for buyers, price-wise at least. For those who saw prices sky-rocket in ’05 and ’06 and who thought that the dream of home-ownership had died for ever, the reprieve has been extended. It will be a demanding and possibly fraught experience due to the above-mentioned reasons, and the cautiousness, understandably, of the appraisal community. However, for those buyers with a steady job and a good credit score there will be some good deals to be had.
Here’s hoping that everyone enjoys a happy, prosperous and most importantly, a healthy 2011.

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