Welcome to 2011!
I do feel that we will have a better year than 2010!
So to start out, lets look and some of my outlooks for 2010:
Rates: I suspect we will see them climb into the low to mid 5's by mid year, with the economy steaming along as it is, I do not for see the Fed increasing rates in 2011, but I do fear that inflation might raise it's ugly head.
Unemployment: This is the HUGE wild card out there. After today's announcement that unemployment went from 9.8% down to 9.4%, this caught most people off guard.
I do however think this is a artificial blip out there, but we have seen some good numbers lately.
Unemployment claims have dropped below the 400,000 per week claim, and we are seeing some job growth.
So I feel that unemployment will dip to the 8.50% to 8.00%, I don't see it dropping below 8%, and if it does, that means someone is playing with the numbers for the 2012 elections.
Home Prices: They are going to go down, I feel we will see a 5-8% decrease in home values for most of the year. But the wild card in there is all of the "hold back" of "shadow inventory". I fear that the 10,000 or so "shadow" homes in the Treasure Valley will be plopped onto the market all at once, which will cause prices to continue to decrease.
Underwriting guidelines: Well with Republicans back in control of Congress, I think less focus will be put upon companies and regulations, I really don't see much tightening up of guidelines out there.
Housing Market in the Treasure Valley: I do see a small glimmer of hope, with mortgage interest rates still at record lows, and home prices so low, even a minimum wage employee can afford a home. But I have seen and heard some good news out there:
-Notice in Sunday's newspaper that Micron is hiring, and it has come to my attention that they have hired about 150 people in recent months. Micron had quite a bit of help wanted ads out there. Hopefully they are all for the Boise area.
-Retailers in the area are showing very strong sales, Costco is seeing more and more "luxury" items being purchased.
-Bogus is on track for a record season!
-Local car dealers are seeing more and more new cars being purchased.
So with job growth picking up and home prices continuing to fall, it would be foolish for someone NOT to buy a home now.
-Glimmers of hope out there for Tamarack! If the BK judge does approve the sale, it will be happy times again in Valley County, which will have a roll over affect in the Treasure Valley.
The negatives out there:
-Albertsons, I feel it is only a matter of time before SuperValue moves the rest of the HQ out of here, I am truly hoping I am wrong, I think they should move the whole HQ here!
-State Workers, not going to be a pretty budget again this year, cuts will have to be made or taxes will have to go up, either way, the state is going to have to trim its workforce, again.
-New Construction, you gotta feel bad for the builders, but until the foreclosures dry up or get significantly less, builders are going to be hurting. BUT, recently I have heard from RE agents that there are new construction homes out there, competitively prices with FC homes, and NEW does smell a whole lot better!
Rates: Remember this date 11/4/2010, that was the day when rate were the BEST they have EVER BEEN, that day, 30 year conventional mortgage was 3.625%, FHA was 4.00%.
Rates will continue to rise, how fast will depend on 2 factors, 1-the economy, and 2- the inflation rate.
I really like how 2011 is looking, I do believe the worst is behind us and although we will not roar back, a 10% increase over last year will be do able.