Local realtors predict 2011 housing market: Part 2

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 agree home prices will not recover in 2011 and may even decline slightly.

Bill Wasowicz, Associate Broker – The Wizards of Waz Real Estate

What is your general expectation for the real estate market next year? I expect inventory levels to remain high as the flow of short sales and foreclosures continues. Buyer interest will increase as they are drawn to the exceptional values. Inventory is currently at the lowest level since mid-July, but this is mostly due to the foreclosure moratoriums imposed by a number of the major lenders a few months back. Unfortunately, this has built up a backlog — Bank of America currently has over 16,000 homes ready for foreclosure — and this “shadow” inventory will be released into the market shortly after the first of the year.

Do you think housing prices here will rise or fall next year?  Housing prices will most likely continue to decline due to the increase in inventory. Another 10 percent or more would not be a surprise. It’s a simple case of supply versus demand. I expect this trend to continue well into 2012 until the majority of foreclosures and short sales have run their course.

Do you think the number of sales will increase or decrease? The number of sales should increase and return to the levels of 2009. I base this in part due to the decline in home prices but also am counting on a gradual upswing in the economy in general.

What will be the main factors impacting the market? Distressed homes will continue to be the driving force impacting home prices. As long as there is a constant flow of these properties into the marketplace, home values will continue to decline. Until the economy recovers, I only expect modest gains in the number of sales as many potential clients that wish to move to Arizona are being held back by the inability to sell their current home.

Malcolm MacEwen, CRB, GRI – Coldwell Banker Residential Brokerage, Arizona

What is your general expectation for the real estate market next year? According to recent article in the Arizona Republic, the real-estate market and the fact that population growth has slowed to about 1.5 percent a year, remain the biggest drags on the local economy. Home prices in Arizona have fallen for 15 of the past 17 quarters and today stand at about what they were in 2000.

Economist Elliott Pollack estimates that there are 50,000 to 70,000 excess single-family homes in metro Phoenix alone and that it will take at least four more years for housing supply to equal demand.

Do you think housing prices here will rise or fall next year? A report from Arizona Regional Multiple Listing Service Inc. shows prices flat going into the New Year.

Do you think the number of sales will increase or decrease? The widely read real estate newsletter “Cromford Report” reports that the pool of prospective buyer-occupants continues to shrink. Overall, experts believe 2011 will be a slow year for new-home sales.

What will be the main factors impacting the market? Reports suggest that a high level of distressed properties, the lack of a first-time buyer tax credit, and negative equity in homes people might sell to move up will be a drag on the market. A gradual improvement in the economy and investors buying up homes at bargain prices will be positive factors.

To read Part 1 of local realtors’ predictions, click here.

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