First off – Happy New Year! I don’t know about you, but i’m SO happy to see a new year AND a new decade! As such, i’m doing a 2010 Real Estate Market Prediction for the upcoming year…these are MY opinions of what will happen, they’re based on what i’ve seen, heard, experienced, and can foresee happening. So here goes!
1. Inventory Will Increase. We’ve had exceptionally low levels of inventory from August 2009 to now. I know December active listings were about 2/3 of the level in 2008. I think many people were scared out of the market last year with prices hitting bottom and the floods of foreclosures. Now that prices are starting to rebound (this will be prediction #2) I think we’ll see more properties on the market for sale.
2. Prices Will Continue to Increase. In hindsight, I think the market in Arlington hit bottom in the beginning of 2009 (Jan-Feb). We’re not quite back to where we were, some pockets are better than others, but overall we’re stabilizing. Right now the lack of inventory is driving prices back up – good news for sellers who have been waiting to put their houses on the market. *It is STILL a buyers market; prices are still far lower in some areas than they were at the peak.
3. Tax Credit Extension Will Drive a Busy Spring Market. Real estate has “seasons.” The market tends to get busy in the Spring (April-early June) and in the Fall (September – October). With the First-Time Home Buyer and “Move-Up” Buyer tax credits extended to April 30, 2010, I think it’ll help stimulate more movement in sales.
4. Interest Rates Will Continue To Rise. For many lucky buyers in 2009, they locked in at an interest rate below 5% – phenomenal! We’ve already seen interest rates begin to rise since December, and I think they will continue to do so throughout 2010. I suspect the Government will make efforts to keep the rates under 6% for the duration of the year, but I don’t think they’ll stay around 5% for very long. Many local economists expect to be around 7%+ by 2011.
5. Foreclosures in Arlington, VA to Decrease. From the numbers i’ve been running, about 20% of the sales each month were either short sales or foreclosures. I think there will be shadow inventory of more properties in distress in neighboring counties – Prince William, Loudoun, parts of Washington, D.C., some parts of Fairfax – but I think Arlington will see that 20% begin to decline.
These are my top 5 predictions for the year. As the year plays out, we’ll see how I did 🙂 As always, i’m here for any questions!