Six Real Estate Trends to Watch in 2011

When identifying real estate trends, you may find yourself a bit discouraged. The market making a comeback is contingent upon finding a solution to the foreclosure issue, which is keeping prices low and buyer confidence even lower. And according to a report published by Standard & Poor's, home prices will fall an additional 7 to 10 percent throughout 2011. But there are a few trends to watch in 2011 that brighten everyone's prospects.

1. McMansions are McOver
One of the biggest real estate trends seen lately has to do with taste and logistics. Not only are empty nest baby boomers leaving behind their high-maintenance properties for urban center lofts and apartments, but the younger generation of home-buyers doesn't want Mom and Dad's giant prefab home in the suburbs. They want smaller, vibrant, walk-able neighborhoods with community amenities like local shops and parks. This means larger homes could sit on the market unwanted for a very long time.

2. Home-buyers want longevity
In the past, a couple would buy a "starter home," and upgrade after a few years of investing equity. Now, a first time home-buyer is planning to stay in their home a minimum of 10 years. The home is a home in the original sense, not just the housing boom "investment" of years past. Repeat buyers are looking for 15 years or more in their next property. This is one of the real estate trends you can expect to see more of in 2011.

3. More Foreclosures Coming
While they slowed down in October thanks to the "robo-signing scandal," according to the Board of Governors of the Federal Reserve, there will be 2.25 million foreclosures in 2011 -- the same as 2010 -- and another 2 million in 2012.

4. Rates stay low while lending gets harder to come by
According to the Mortgage Bankers Associates, included in important real estate trends for 2011 is the expected increase of fixed mortgage rates to 5.1 percent by the end of the year. This is due in large part to the Federal Reserve buying $600 billion of Treasuries to keep interest rates low and boost economic growth. As great as that is for a buyer, the recently raised lending standards have made it harder to get financing. While some argue this is holding back the market recovery, others consider it a necessary evil. Over-extended buyers that were given loans exceeding their means by irresponsible lending companies caused much of the housing crisis. Tightening the standards is a logical backlash to this practice and it's dire consequences.

5. New construction stays low
The effect of the current market's real estate trends are felt nowhere harsher than in new construction. The combination of unemployment, plus an influx in inexpensive foreclosures and short sale properties means fewer new homes need to be built to accommodate demand. In 2009, only 550,000 new housing units were built, compared to 2.1 million units at the peak of the housing bubble in 2005. Unfortunately this could mean a housing shortage in the near future.

6. Cash is King
Just like last year, investors with the capital available have a major advantage with all the current real estate trends. So many banks are holding so many foreclosed properties that all-cash offers are frequently being accepted over higher offers involving loans. For a traditional homebuyer, this means all offers must be made as attractive as possible, including large down payments and often making an offer close to or above the asking price.

Lauren Roberts is an REO industry veteran and the founder of REO Maestro. Founded in 2001, Lauren's objectives and approach were very deliberate: to aggressively broaden the talents of her REO agent team by combining their expertise with systemic tracking, reporting, organization and automation. She partnered with Shupe Software Technologies whose progressive approach to software development naturally and seamlessly complimented Roberts' vast industry expertise. Inspired by overwhelming industry and peer demand, Roberts and Shupe Tech successfully launched REO Maestro to REO professionals nationwide. In 2010, the company changed its name to Realis as they welcomed even more advanced technologies to their product offering.

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