Here we are, only three weeks into the New Year and already my phone is ringing off the hook with that old familiar question, “Dan, what is the real estate market going to do this year in Denver?” Just three weeks ago, I wrote a column entitled, “New Year’s Forecast.” In that column, I addressed seven points from jobs to short sales and what I thought had to happen in 2011 for a significant recovery. If you would like to go back and re-read that column, you can at www.coloradodreamhouse.com/news.
I won’t take time here to reiterate the same points from a few weeks ago, but I do think that we should look at the same topic from three different approaches: the pessimist, the conservative, and the optimist.
1) The pessimist will obviously say that 2011 will be no better than 2010. They’ll point out the fact that the market will not get better until there are more jobs and in the case of the luxury home market, they’ll point out the large amount of inventory and years of recovery. A pessimist will probably conclude that it will continue to bump along the bottom of the market, seeing some improvements in some quarters of the year and some downturn in other quarters, and they’ll concede that most of the success, if any, will be in the lower price ranges. This group of people will not be buying or selling.
2) The conservative will say that it will be a slightly better year. They’ll point out the Bush tax cuts being extended, low interest rates, and lower prices on most market segments. They’ll say that these factors are reason for optimism, but their enthusiasm will be blunted by the lack of jobs, a sluggish overall economy, and the ever increasing concern for the national debt. This group will make some moves in buying or selling, but they will be slow and calculated.
3) The optimist will say that 2011 is going to be a great year. They’ll point out the new leadership in Washington and they’ll be excited about the possibility of the newly elected officials getting federal spending under control. They’ll say that it will translate to more consumer confidence, more spending, and more people buying homes. They’ll also think that the Bush tax cuts will stimulate the economy and they’ll argue that there continues to be a pent up demand from home buyers. They’ll be hopeful on the loosening of credit and new regulations regarding a quicker process on short sales.
So there you have it. Three different points of view on what’s going to happen in the real estate market this year. Which one is right, and which two are wrong? I’ve already stated what I think three weeks ago. I’ll ask you, the readers, to tell me which camp you fall in. After I tally the responses, I’ll tell you what the majority of people think about the forecast for 2011.
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