Total housing sales in 2010 will be down about 8 percent from last year, and will mark the bottom the downturn, says a monthly report from Fannie Mae economists.
“We expect home sales to increase by about 3 percent in 2011, says Fannie Mae (OTC BB: FNMA) chief economist Doug Duncan. “However the pace of the recovery will be largely determined by labor conditions. If hiring improves at a faster pace than expected, home sales will likely see a stronger gain in 2011 and visa versa.”
This is good news for the long-term picture for sure, but in the short-term locally we’re still going to see slowly declining values throughout the next 12-14 months. Until the available inventory in Chicago is reduced to normal levels (below 5 months worth), we’re going to continue to see downward pressure on home prices. Alternatively investor buyers have started coming out of the woodwork in force this month. I’m getting increased showing traffic from buyers looking to purchase with cheap financing and rent out the space for anywhere from a 5 to a 15 year investment with good projected returns. Clearly the smart money is betting on a turn-around and sees this as their opportunity to get into a solid real estate investment, one that will work as a hedge for the inflation wave that is on the horizon. Personally I too am actively looking for my own investment purchase with a few partners who prefer armchair investments but want to get in as well. There is a lot of great stuff out there with new deals popping up all the time. – Niko