The year end market data for Truckee Real Estate has been compiled, and 2010 can be summarized as, “not great”. The median price for Truckee homes declined 9%. Less than the 15% in 2009 but still a fair decline. The good news is that 2011 is forecasted to actually turn around and start growing, albeit slowly.
It’s always risky to make specific forecasts because there are so many factors that could dramatically impact the industry – unemployment levels, the stock market, consumer confidence, and political decisions, to name just a few. But there’s reason to believe that we’re trending in the right direction.
The California Association of Realtors in its 2011 housing market forecast predicted that the golden state should see a modest 2 percent increase in sales to 502,000 homes in the coming year. And after two consecutive years of record-setting price declines, the median home price in California will climb 2 percent in 2011 on top of this year’s 11.5 percent rise, according to the CAR forecast.
“California’s housing market will see small increases in both home sales and the median price in 2011 as the housing market and general economy struggle to find their sea legs,” said CAR President Steve Goddard.
While there are certainly challenges ahead, the upcoming year may create an opportunity trifecta for buyers: Continued historically low interest rates, extremely affordable housing prices, and plentiful inventory in most price levels. We haven’t seen this combination in many years.
The caveat is that there is no guarantee that mortgage rates will remain where they are today. In fact, in recent weeks, we have seen rates increase as the 10-year and the 30-year Treasury bill rates edge upward. And even a one-percentage point increase on a $500,000 mortgage can add several hundred dollars to a monthly payment. But for now, the rates are still extremely low by historic standards.
Additionally, the nation’s economy continues to grow, albeit slower than many of us would like. But corporate earnings came back quite strong last year, which could bode well for employment growth in 2011.
The real estate market in Truckee will likely benefit from the Bay Area’s resurgent prices and market activity. I think there are still some real concerns out there, but we appear to be healing a little bit.
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