Local real estate pros predict lackluster 2011

To get a sense of what the housing market will be like in 2011, InMaricopa.com asked several local real estate professionals to look ahead and give us their assessment of likely sales and price trends in Maricopa.

Despite a few glimmers of optimism, most realtors agree home prices will not recover in 2011 and may even decline slightly.

Dayv Morgan, Realtor – ByTIG Real Estate Corporation

What is your general expectation for the real estate market next year?
I anticipate that market conditions will likely remain the same over the next year, and prices may take another slight drop.

Do you think housing prices here will rise or fall next year?
Supply skyrocketed over the summer after the first-time homebuyer tax credit expired. As a result, the median home price in Phoenix dropped from $135,000 in April to $125,000 in October. There are still a large number of anticipated foreclosures for 2011, as many 5-year adjustable loans from the “peak” in 2006 are scheduled to reset. Until the supply of foreclosures decreases and new home sales increase, prices will remain relatively flat.

Do you think the number of sales will increase or decrease?
Economic factors point towards a decreasing unemployment rate and continued low interest loans, which should increase demand. Additionally, a new segment of buyers will enter the market: people who have previously done a short sale. Buyers can re-qualify for a loan in as little as two years after completing a short sale. In 2009 there was a 1,000% increase over 2008 in the number of closed short sales in Arizona, and these same people will be eligible to finance a home in 2011.

What will be the main factors impacting the market?
Canadian buyers remain an important part of the housing market recovery, especially in Maricopa. If the Canadian dollar remains strong, look for market to improve the last few months of 2011 as the summer heat begins to fade.

Rita Weiss, Broker/Owner – Desert Canyon Properties

What is your general expectation for the real estate market next year?
Generally, the real estate market in Maricopa has not changed appreciably in 2010 and will continue on the downward trend through 2011 according to most housing industry experts. With statistics what they are, 2011 will be a repeat of 2010 in Maricopa, sad but true.

Do you think housing prices here will rise or fall next year?
The housing recovery has stalled, and the National Association of Realtors recently predicted that homeowners can expect little, if any, increase in home values nationwide in 2011.

Do you think the number of sales will increase or decrease?
The rate of foreclosures has slowed over the past year but the number of short sales has increased due to mortgage delinquencies. There were 953 foreclosure sales in Maricopa in 2010 compared to 2009’s 1,651. There were 564 closed short sales in 2010 compared to 467 in 2009.

What will be the main factors impacting the market?
Maricopa is ranked 35th out of 40 in the greater Phoenix area for price per square foot — down 2 percent in 2010 — making Maricopa a top contender for the most affordable housing. For the first time in nearly three years, repeat buyers and investors have taken over first time buyers as sales leaders. As a result, prices of bank-owned REO’s and properties involved in short sales are being bid up by multiple offers and cash buyers.

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Look for two additional realtors’ assessments of the housing market later this week.