Do you think the housing market will worsen or improve in 2011?

[Shagbark Hickory]

I think it will largely be the same.
Even before this crisis there was an oversupply of housing. There are houses in my subdivision, in a desirable area have been on the market for 2 or more years. 3 years in one case. There's nothing wrong with the houses. There are just too many unsold new houses that are cheaper. Of course it helps when banks are loaning money but I think more of the problem was banks were not loaning money to the builders so a lot of those unsold homes were foreclosed.
In the inner city neighborhoods where homes are boarded up, does anyone forecast any hope for those areas? Aside from the beltline proposal which is realistically years away at best, this areas only hope is an influx of jobs and opportunities. But we know where those go.

As mentioned we didn't have a big rapid inflation like florida and california but we definitely have our fair share of mcmansions and bubble or not, people were buying as much house as they could get a loan for even if it was small potatoes compared to house prices elsewhere.
It will take much longer for the supply of these unsold mcmansions to level out.

Intown high end neighborhoods where there is plenty of money by not enough homes I doubt they even noticed any bumps in the road.

[DiderotsGhost]

I think in general, prices will begin to appreciate some time around 2011 - 2012. But it will be more in line with historical norms. No more double-digit price gains year-over-year.

Some people think the bottom is already in, but my problem with that hypothesis is that (a) unemployment is above double digits (realistically speaking), (b) more foreclosures are on the way, (c) the Alt-A and Option ARM bombs are still waiting on the horizon, (d) banks are going to be poorly capitalized for another 4-5 years at least, (e) there's a giant catch-22 going on --- (i) if deflation continues, the economy continues to worsen and prices continue to fall, (ii) if we see inflation again, interest rates will rise considerably, which will lower demand for housing.

I think by 2012, most of the damage will be done. I think it's possible that the bottom has already come in some locations, but it's difficult to say where. I wouldn't be too worried about it one way or another, though, b/c I don't think housing prices are going to skyrocket any time soon.



My strategy right now is to buy into quality REITs and eventually use that money for a down payment. The advantage of buying REITs is that many of them are already priced for a near-apocalyptic scenario. If I win, I have a hefty-sized down payment to buy my own home. If I lose, prices go down anyway, so I'd be paying less for a home. I'm hoping to buy around 2011 or 2012.

[Ron.]

If you're going to buy now is the time. But if it's an issue of you not having the mony, there will always be bargins in every market.

[atlantagreg30127]

Well, according to THIS article, there is a trickle of building permits being issued in Cobb now, as opposed to several months of pretty much "zero" in the way of new building permits. So it would stand to reason that in 2010 and 2011 things will slowly start to increase more and more from there.

The next question might be, why would new building permits be sought by developers when there's a huge inventory of unsold homes already out there right now? My fear is that developers have learned nothing at all from the recent experiences, and in a few years they'll be right back to chugging out poorly planned and poorly built developments left and right just as they did before.

[Britishintown]

I think the market will start to improve spring 2010.

[emma31]

I think the bottom is here already. Yes there may be individual deals that drop significantly beyond where they are now but generally speaking, I think we've bottomed out.

I also think it will be years till prices get back to where they originally were but you would have bought cheaper than everyone around you - there is some protection in that.