Following the first holiday season on the road leading out of the recession American ideas of homeownership has changed.
The stigma of losing a home has decreased as homeowners have noticed that the Wall Street interests who labeled strategic defaulters irresponsible and cowardly have virtually all engaged in strategic defaulting themselves.
Homeowners are simply more concerned with making smart, long-term financial decision than fighting with uncooperative banks to hold onto deeply underwater homes. One outcome will be that the properties of homeowners who are under water will decrease next year as more homes enter the foreclosure funnel and become bank-owned properties.
The picture for homeowners is not entirely bleak. Even though strategic defaults will rise, the average American homeowner has demonstrated a deep desire to hold on to their homes. Those in better equity positions will experience a deeper-than-ever gratitude for their homes. This will manifest in an increase in home improvements.
Those who choose to sell their homes in the new market, will do so with a greater receptiveness to the market than ever before. When their homes lag for 30 days, they'll start cutting prices with less reluctance than before.
Many sellers nationwide will start their first phase of detaching from their homes and list them as short sales. They will be less attached to a successful short sale outcome, refusing to spend extensive amounts of time fighting with uncooperative banks. Uncooperative banks will find themselves adding those home to their inventories of foreclosed homes.
Buyers fall into 2 catigories. The non-urgent buyer who missed the tax credit. This buyer will only commit to the right property, even if that means they must see 100 homes and make 20 offers to do that. The other group of buyers will be very strategic, resourceful and adept with information, realizing that their decision to buy a home will be a long-term one
2011 will truly be a season of reason, when it comes to the way buyers, sellers, and homewoners approach their real estate decisions, with reason manifesting itself in different ways for the different niches within these consumer groups.