Increase in Consumer Confidence Points to Stronger Real Estate Market in 2011
The gradual recovery of the real estate market has only been held in check by consumer confidence, a category that has recently made substantial gains, according to Prudential California Realty’s February 2011 real estate report. The report, which includes an analysis of data created by the Wells Fargo Economics Group, showed that consumer confidence jumped 7.3 points in January to a total of 60.6.
All of the key components increased solidly during the month, making this the best report for consumer confidence since the onset of the financial crisis. In Southern California, investors have returned, indicating an increase in confidence among people that understand the dynamics of real estate.
With inventory levels in the below $1 million range at a level that should keep prices stable throughout the year, 2011 could represent a prime opportunity for buyers to begin searching for a home with an experienced Realtor. For sellers, this year presents a time when the advice of a qualified real estate professional is more critical than ever before to set realistic prices and receive a favorable outcome on the sale of a home.
Data compiled by the National Association of Realtors® (NAR) were also positive for both buyers and sellers of real estate, indicating that it only currently requires 13.6 % of median family income to buy a home. The unprecedented affordability found in today’s real estate market has made first time and traditional price range buyers quickly return to the market in 2011—a trend that is further evidenced by the fact that there is less than four months of inventory available in many price ranges below $1 million.
“One of the only major risks for buyers today could be increasing mortgage rates,” said Mark Johnson, vice president of marketing for Prudential. “It’s unlikely that mortgage rates will remain at the historic lows we have experienced over the past few years.”
Prudential’s monthly report features in-depth analyses and editorials about housing market data compiled by the California Association of Realtors, DataQuick and the multiple listing service. The report, which was developed to ensure consumers have the resources and information they need to make informed decisions, can be obtained by contacting a local Prudential agent. www.prudentialcal.com
Prudential California Realty delivers proven results and offers personal representation across Southern California and the Central Coast. A Berkshire Hathaway affiliate, Prudential California Realty is one of the top five brokerages in the nation.