More Than 108 Experts Provide National and New Hampshire Real Estate Forecasts for 2011 and Beyond

From national and NH real estate to the U.S. economy, the predictions for 2011 are in.  Like any predictions, they vary from gloomy to cheery.  Overall, the national real estate forecasts are more positive than negative for 2011 and the New Hampshire forecast looks especially positive.  Below are my 6 top sources for expert predictions and a sampling of what they have to say this year:

  1. MacroMarkets Home Price Expectations Survey predicts:  A cumulative 8.3%  home price increase over the next 3 years (i.e. a *very* gradual increase in home prices).  This survey is of a panel of 103 leading housing economists and real estate experts, half of which expect the beginning of housing recovery in 2011, and half who predict the rebound won't take told until sometime in 2012 or later.

  2. The National Association of REALTORS®’ (NAR) Chief Economist Lawrence Yun is projecting: 

• Once businesses pick up spending, job gains will quicken and home sales—fueled by strong affordability and plenty of pent-up demand—will rise.

• 5.2 million existing-home sales in 2011, up from 4.8 million last year.

• Modest improvement in prices—a rise of about 1 percent this year on a national basis. That would be the first in what Yun says will be a series of small but steady gains in the years ahead that will eventually bring home sales back to a normal level. 

• All of the price excesses from the housing bubble have been squeezed out of the market and interest rates remain at historically low levels, making buying attractive now.  

  3. The Joint Center for Housing Studies (click on The State of the Nation's Housing 2010 pdf) says:

• If the past is any guide, the strength and sustainability of the housing recovery will depend most on the bounce back in employment growth.  Unfortunately, most economists predict that the unemployment rate will remain elevated as discouraged workers reenter the labor force amid slow gains in jobs.

• The oldest baby boomers are just turning 64, with millions soon to follow. Despite their losses in wealth caused by the correction in home and stock prices, the baby boomers will drive demand for senior housing suited to active lifestyles as well as for assisted living facilities.

  4. According to the Standard and Poor / Case-Schiller index:  Home prices are expected to rise 12 percent in the next five years. And, according to a survey of economists, that upturn should begin in 2011.
 
  5. WalletPop.com’s prediction for renters in 2011:  The American Dream will include both renting and owning.

• Lifelong renters will begin to buy.  As jobs grow, prices hit bottom or move past their bottom in the handful of appreciating markets, and interest rates start what is likely to be a long, volatile climb up from the all-time lows of 2010, extreme affordability will push even some lifelong renters off the fence and into the market.

• Lifelong owners will begin to rent.  Baby Boomers who have owned homes for decades and lost them at the trough of the job and housing markets will become renters-by-choice.  Retirees will rent their current homes, rather than selling them, move to warmer climes and rent instead of own their retirement homes, at least until the housing market stabilizes and the mortgage market relaxes.

  6. Local demographics and consumer markets expert, Peter Francese says:

•  "Measuring by the Philadelphia Federal Reserve Bank's index of economic activity, New Hampshire is recovering from this recession better than any other state...."

• "One other important indicator is our unemployment rate, which was 5.4 percent in November. That was the fourth lowest rate in the nation but is probably below 5 percent by now. Our state is clearly moving toward a period of economic growth that can only be good news for our housing market."

• "End of the year data from NNEREN shows that about 850 homes were sold in December 2010, a 2 percent increase over the previous December. The median selling price was $214,900, which was 4 percent higher than December 2009."

• "For the year 2010, the median home selling price was $215,000, which was 1 percent higher than the 2009 median of $212,000. That’s the first annual increase in several years, and when combined with positive indicators discussed above, suggests that home prices have stabilized and are likely to continue on an upward trend this year."

Although no one can be certain what will happen in 2011 - especially for the struggling markets and price points - we can all gain a little hope from these 2011 forecasts.

If you’d like to buy or sell a home in 2011, I can help. Call me at 603-821-1134 or email me at Dave@TeamHeeter.com for more information.