As 2011 is now officially underway, there appears to be good reason to feel upbeat abut the new year. Buoyed by the strongest holiday spending since 2006, retail sales ended 2010 on a high note.
Meanwhile, corporate earnings are up, there's growth in the manufacturing sector; and the number of people applying for unemployment benefits recently to their lowest level since the second lowest level since July 2008.
Investor confidence is also up. Excluding the volatility in oil prices due to the unrest in the Middle East, since the bull market began in March 2009, the S& P 500 has risen more than 86 percent; with a strong year-end surge pushing it up 20 percent since September alone. Consumer confidence is at its highest level in half a year, suggesting that people not only feel better about the economy but also more secure in their own circumstances.
In our local real estate market, sales results for 2010 were better than expected. We have updated our website with 2009 and 2010 comparisons by town, which you can find at Local Sales, or you can download a summary report at: 2010 Sales Results.
Forecasts from such closely-watched sources as Moody's, Standard & Poor's, Wells-Fargo, the Mortgage Bankers Association, Forbes, Morgan Stanley, Bloomberg News and the Wall Street Journal call for an increase in home-buying activity during 2011, albeit only a modest one. The past few years have been fraught with tough economic lessons, prompting most of us to save more and spend judiciously.
Mortgage rates should remain historically low for now - but are forecast in many circles to increase between now and the end of the year. For this reason, buyers should think about securing a mortgage closer to the beginning of 2011, rather than later on in the year. At this point, the savviest buyers are paying closer attention to what the home will cost over the life of the mortgage; as a modest up-tick in interest rates could potentially blunt the benefit of any additional price declines.
Meanwhile, if your goal is to sell your home in 2011, here's why you should think of listing it within the next 60 days:
- Interest rates have spiked recently, jumping over ½ point in the last several weeks. Such volatility is causing many buyers to act now for fear that rates could climb later in the year. Plus, if rates do go up, the number of buyers who qualify to purchase homes at each price point will diminish proportionately.
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- If your goal in selling is to trade up to a larger, more deluxe home or to downsize to a smaller property, the time is now to take advantage of the widest section of buying opportunities currently available.
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- The last few months have seen a significant increase in market activity, and we expect this to continue through spring. Although still high, the inventory of homes is lower than it has been for the last two years.
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- Whatever your true reason is for wanting to sell, once you become a buyer again you too can enjoy today's unprecedented values.
We wish you good fortune and thank you for your continued support - it is greatly appreciated.
