2010 was definitely not a ‘10’ on the real estate scale, in that sense, I am glad it is over. Let’s look at what has happened over the past several years.
During ‘The bubble’ of 2003 to 2007 home prices in Seattle were driven to artificial highs, mostly due to loose lending practices that allowed just about anyone to qualify for a home loan.
This was followed by the ‘bust’ of 2008 to 2009, when the general economic downturn, tightening of lending practices and excess inventory due to some part in rising foreclosures, started bringing house prices down. Many homeowners became unemployed and few sellers who had purchased their homes after 2004 could resell their homes, resulting in more and more foreclosures. The first time buyer tax credit helped reduce inventory somewhat but after it was done home sales started to slump even further.
2010 was the year of aftermath. By 2010 we could all agree that the economy was suffering and not getting better anytime soon. Sellers were being more realistic about pricing their homes in a falling market and many unable to sell were choosing a short sale instead of foreclosure. Some fully able to pay their mortgage were walking away from their homes just because of the lost or negative equity. On a positive note, for most of the year we were at 50 year lows in mortgage interest rates. Buyers who qualified and felt confident with their employment were getting great deals on properties with cheap borrowed money.
My 2011 Predictions: Home prices in close-in Seattle neighborhoods will stay stable but have no increase. Home prices in outlying areas are likely to fall some more, but not much. Interest rates will likely edge up but stay at historical lows. Bank owned homes will continue to flood the market. Buyers who feel stable are going to act this year but they are going to continue to be choosy, demanding and only purchase homes which show their best and need few repairs.
In 2010 my RE/MAX office in Ballard went bankrupt and I am happy to be at at RE/MAX Metro in Eastlake, which is not really a big change at all, besides having to now drive across town when I used to just scoot down the hill from my Whittier house (which I by the way bought in 2007, ouch!). I also I am flying solo again, my real estate partner of three years has decided spend time with her new baby. Due to this I am in the middle of re-branding my business and thus have abandoned the old blog and created this new one. Look for my new custom website coming soon as well. Happy New Year!