Will Real Estate Recession Be Over In 2010

The real estate market will experience growth and expansion next year according to projections from most major real estate organizations. They say "the recession will be behind us."

That is the forecasting consensus of the National Association of Realtors , National Association of Home Builders, Fannie Mae and Freddie Mac. They are all predicting solid growth in 2010, according to a study conducted by the Real Estate Economy Watch. The consensus is in sharp contrast with the market these past few years.

This year, 2009, will show about a 36% drop in residential construction (starts), and a 17% drop in new home sales. The organizations are predicting a modest increase in existing home sales next year. This year, many sales resulted from the availability of foreclosed and other distressed properties, along with low mortgage interest rates and a substantial tax credit for first time buyers. In fact, foreclosure sales accounted by about 50%of all home sales during the first quarter of this year - 33% during the second and third quarters, according to the NAR.

The organization generally agreed on their projections for next year's home sales, but differed on home prices. the group consensus pointed to existing home sales increasing by about 9.6% - that is about 5.4 million units.

Luxury homes and condos are fairing much better in the Southeast Florida market. Miami has seen a dramatic surge of sales in the last half of 2009 mainly due to price corrections closer to realistic market values. These reductions have averaged a lower selling price of 20% to 30% for top locations for beachfront or luxury single family homes communities. Cash buyers who had been waiting for the opportune timing were able to grasp these properties at the best price levels in several years. This has depleted inventories in both homes and condos, probably indicating a price rise going forward to 2010.