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To be honest, the recovery of the Real Estate Market has a lot to do with the relationship between these two important statistics: The Number of Qualified Buyers and The Number of Homes available to these buyers. Like in any other market, if you have too many homes available and too little buyers, then prices are going to drop in a desperate attempt to move the inventory.
Some researchers say the shadow inventory could go over 7 million properties in 2010, and it could take over 47 months to liquidate these properties. It could be, but as scary as the numbers may look, I don’t want to rely 100% in statistics, so I would like to know what you think. I want to get the opinion of Real Estate professionals that are actually out there, working hard to move the inventory in their own local markets and dealing directly with buyers and sellers.
I could spend days speculating about what is going to happen with the Real Estate market, but instead I would like to know what’s your take on what’s happening with the Real Estate Market today. Based on what you see out there as you go out day-in and day-out to buy and sell properties, what do think 2011 will have for in store for us?
I really care about your opinion, so at the end of this article there is a form where you can send us a quick reply about your personal experience in your market.
Some of the things I would like to know from your professional experience are:
- Are prices Declining again in 2011?
- Have we reached the bottom of the Market?
- Are we seeing signs of recovery?
- In your opinion, Is the government going to have to intervene again?
- Are people buying enough homes to liquidate the so called “Shadow Inventory”?
- What are some possible solutions to restore the market back?
I want to thank you for your participation, so let’s get the conversation started….
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Hi Don, thanks for your comment. You point out some great insights, like the fact that lack of population growth could, and I believe will, affect the recovery of the Florida market.
I am also with you when you talk about how the government incentives influenced greatly the increase in sales that we saw recently.
I also liked the way you use history to explain why you don’t see an easy recovery in this market.
Once again, thanks for you comment.
I think we are in for a long period of instability and price issues, at least here in Florida. While many traditional signs of a recovery have appeared here in Florida, like increased closed sales and lowered inventory, some of that has been unnaturally induced by government incentives. These government incentives are now gone, and rightly so. But sales have suffered a little and the shadow inventory is a concern along with the fact that prices have not begun a recovery, like sales were 18 months ago. Generally in past recessions, or real estate cycles, sales start to go up in the first phase of the recovery and then prices follow 6 to 12 months later. This has not been the case in Florida this time around. I believe the main culprit that is responsible for this “unrecovery” has been something that was not present in past real estate bubbles in Florida, that is lack of population growth. Ever since the 1940′s, Florida’s population has grown rapidly so even if we over-built, extra homes were able to be consumed by the flood of people into the state. We no longer have this flood of people and we even had a net reduction in 2008. I believe until we start slowing the construction of new homes in the state, we will not see a recovery at all for real estate and the economy in Florida in general for years to come. Another solution would be to make the state attractive to people and business again.