Now that our homes are no longer scented with pine and shortbread, it’s time to get back to work and start thinking about what 2011 has in store for real estate. We ended the year with a bit of good news when we heard that the number of foreclosed properties dropped from October to November. However, our optimism about the state of the market took a beating when found out that (1) many more people are opting to short sell their homes instead of going through with a foreclosure and that (2) the banks are up to their noses in unprocessed home foreclosure paperwork. Add to the mix the fact that the spike in short sales is deflating home prices across the nation and you have yourself a pretty bleak picture for the future the real estate market.

But not everyone is hanging their heads. Billionaire and CEO of Berkshire Hathaway Warren Buffet has not been shy about his optimism regarding home prices, foreclosures and other vitals of the real estate market in 2011. However, Mr. Buffett’s comments came early from last year so one has to wonder whether he saw the market rebounding by 2011 or at some point therein. The drop in foreclosures from October to November just might be the first inkling of this predicted recovery.

Another real estate vital that we need to consider in the New Year are interest rates on home mortgages. Rates are currently at all time historic lows, but a slight increase in December left many analysts wondering if this was a sign of things to come. If it continues to climb in the coming months, now—more than ever—would be the time to refinance your mortgage and lock yourself in at a low rate. Better yet, if you’re thinking of buying now might be the time. No one wants to live with the regret of knowing that they could have dramatically reduced their interest payments.

One factor that might help our anemic real estate market in the coming year is the improving economy. We are far from being out of the woods and a return to 2006 home prices is a ways off, but there are encouraging signs: consumer confidence is up, unemployment down and the stock market looks healthy. We may not be able to know exactly what 2011 has in store for real estate, but so long as we remain both cautious and optimistic we’ll see ourselves through it.

Tags: , , , , , , ,

This is filed under National Markets.

     Twitter It!