How's It Going?: Housing

If you're buying or selling a home in 2011, you can expect to see more houses on the market. You can also expect a higher percentage of those homes to be foreclosures or short sales.

But don’t count on prices rising or banks to start handing out an abundance of loans any time soon.

That’s the conflicting news greeting people in the real estate market as 2011 emerges.

"I see a stronger housing market coming down the path," said Wayne Gregori of Gregori Group Real Estate of San Leandro. "2011 isn't going to be a rock 'n' roll year, but I think we'll see some moderation in the housing market."

After a slow autumn in San Lorenzo, 2011 looks cautiously optimistic.

"We are expecting 2011 to continue the same slow and steady pace," said Jessica Medina of Village Properties & Associates in San Lorenzo. "The interest rates have gone up a bit, but analysts are predicting that they will hover in the low 5 percent this year. "

The housing market has been in disarray for more than two years now.  Foreclosures have spread across the country with few locales spared.

The Bay Area reported a 5 percent drop in foreclosures last year. Still, there were 51,525 houses in some stage of foreclosure, according to RealtyTrac.com.

San Lorenzo Unified estimates that 22 percent of homes in the school district are in foreclosure.

In Alameda County last month, there were 1,000 notices of default, the first stage of the foreclosure process. That was a 19 percent drop from November and a 16 percent decrease from December 2009.

On the other hand, federal officials reported last week that 5 million Americans are at least two months behind in their mortgage payments.

Those involved in the real estate market are hopeful 2011 will be better, but they say the volatility of the industry makes recovery an uncertain thing.

"The market isn't great, but there's hope the economy can continue to motor on," said Gregori.

For home buyers, the No.1 obstacle is still financing. Banks have recovered from their 2008 financial meltdown, but they remain cautious in approving loans.

"Banks are still being tight with their money, but I think we're going to see that loosening up," said Gregori.

Another problem for home buyers is inventory. There are still a low number of homes on the market, so the selection is limited. Gregori said that won't change until homeowners are convinced the market has recovered.

"There is reasonable selection," he said, "but the people who don't have to sell aren't selling."

Interest rates are expected to rise during the year, but home prices are less certain.

For the most part, that is good news for home buyers.  They can purchase a nice house for a price well below what it was valued three years ago.

"Buyers who are established and have good credit have got the upper hand," Gregori said.

Gregori added that higher-income regions such as Piedmont, the San Ramon Valley and the Tri-Valley will rebound more quickly. Places such as Castro Valley where homes are located in the hills will also fare better. The flatlands of San Leandro, San Lorenzo, Union City and Newark remain on shaky ground.

Real estate experts agree knowledge in the housing market is a key to making smart decisions.

The Tri-Valley Housing Opportunity Center in Dublin holds seminars every month for potential home buyers.

Milly Seibel, the organization's executive director, teaches people about credit, loans, the home buying process and other important information.

"It really helps to understand," she said.

Seibel does see the real estate market picking up again in 2011.

"I think homeowners are feeling more comfortable and are ready to move on," she said. "They feel like they're not trapped in their homes anymore."