Most economists don't expect a recovery in the housing market in 2011, but some real estate experts say they remain "cautiously optimistic."

Can you believe 2011 is only a few weeks away? Where did 2010 go?

Seemed like yesterday that the market was all abuzz about the homebuyer’s tax credit. The incentive spurred a lot of home buying activity early in the year, but as expected, the flurry slowed down when the credit expired.

We aren’t going to see that same excitement as we start 2011, but the good news is that homes will continue to be affordable.

Prices are still coming down in some markets, so if you’re on the fence, it’s a good time to start looking. And if you’re an investor with lots of cash, there are plenty of opportunities for you.

Find out what else you can expect in the new year >>

Start planning your home purchase >>

ShareThis

If you (or your spouse) haven’t owned real estate in the past three years and you’re in a good position to buy a home, it’s time to get your butt in gear!

The deadline to take advantage of the $8,000 tax credit for first-time buyers is midnight on Nov. 30, and that’s coming up sooner than you think.

READ: You have to close on the home purchase by Nov. 30.

The closing process has been known to take at least 30 days, and now with stricter lending standards and a more complicated appraisal process, delays can be expected. And tack on even more time if you’re dealing with a foreclosure or short sale.

So since you’re trying to close by Nov. 30, and Thanksgiving is the week before, plan to have a signed contract and begin the closing process no later than the end of October, unless you’re an all-cash buyer and don’t need financing.

And remember you don’t have to wait until you file your taxes to get your credit. Ask your mortgage broker or real estate professional about programs that will let you apply the credit to your closing costs now.

For most of the year, first time buyers looking for “bargains” (i.e. distress properties) were the main driver of home sales. Should that group go away with the end of the tax credit, the industry could be in for hard times in 2010.

That’s why the National Association of Realtors is lobbying to have Congress extend the credit and real estate agents are creating a sense of urgency (ex: Prudential Connecticut Realty countdown). And you’ve probably seen all the TV commercials encouraging people to buy.

So what are you waiting for?

Find out the 6 steps to beating the tax credit deadline >>

Of course, if Congress decides to extend it, then all’s good. But with all the focus on healthcare reform, that’s no guarantee.

ShareThis

As a real estate editor and licensed real estate salesperson, friends and colleagues often ask me what I think about the market and whether a property they like is actually a deal.

Sometimes I feel like Howie Mandel on “Deal or No Deal,” except on my game show, instead of opening random suitcases looking to eliminate low dollar amounts, homebuyers are looking through houses hoping to eliminate potential money pits.

They weigh the pros and cons of holding on to their current property — their “suitcase” if you will — or taking advantage of what they think is the “ultimate deal.”

To them, I’m the quintessential expert, on topics like home value and foreclosures, because I don’t stand to benefit from the purchase the way their official agent will and they know I’ll give them a straightforward, honest opinion.

So when my Seattle friends showed me a bank-owned property they were interested in, we talked about what needed to be fixed and how much they would need to put into the property to get it into move-in condition.

The exercise proved helpful. If I posed Howie’s question “Deal or no deal?,” the answer would be a resounding “no deal.”

Buying a home? Try these resources from FrontDoor.com:

• Pricing and Home Value
• Home Finance Guide
• Drama-Free Real Estate

ShareThis

Sure staging and price play huge factors in whether we like a place, but house hunting is really about finding a house that fits your current lifestyle and aspirations. What really makes a homebuyer ultimately make an offer is feeling a personal connection to the place, not necessarily its price tag.

Ladies, think of it this way. They say when you’re shopping for a wedding dress, you’ll know when you find the one. It just fits. (And since 90 percent of real estate decisions are made by women, I figure you’d understand the analogy.)

This week, I talked to Eileen Imada and Walter Dixon, who just bought their first house in Newton, a suburb of Boston. After three years of looking for their “perfect” home, they learned a valuable lesson in determining home value and have a great tip for all you first-time buyers. Tune in for their full video on the FrontDoor Unlocked Vlog — coming soon!

Click here to view the embedded video.

Buying a home? Try these resources from FrontDoor.com:

• Create a “Vision of Home” from FrontDoor Insider Tara-Nicholle Nelson
• House Hunting Tips
• Home Styles Guide
• Drama-Free Real Estate

ShareThis

How it used to work: A first-time buyer would complete the homebuying process, file their tax return with the IRS in January and the credit would be applied to the taxes owed. If you don’t owe anything, you get the full credit.

How it works now: A new federal program will let you use the tax credit immediately — during closing. This is an even sweeter carrot, because the down payment and closing costs are typically the biggest obstacles to overcome when buying a home.

In today’s uncertain economy, people would rather hold on to their cash. With lenders charging higher fees, this program lightens the burden of closing costs. Average fees for a $200,000 mortgage in 2008 with a 20 percent down payment were $3,118, according to Bankrate.

The catch or two…: How much your credit will be depends on your income, tax-filing status and home price. You have to get a Federal Housing Administration (FHA) mortgage and put down at least 3.5 percent of the purchase price. Of course it doesn’t hurt to use the credit to boost your down payment, which could help lower your interest rate.

Also it’s important to note that like conventional loans that require private mortgage insurance (PMI) when the down payment is less than 20 percent, FHA loans require what’s called a mortgage insurance premium (MIP). With the FHA loan, you pay an up-front premium (1.75 percent of the loan) which is financed into the mortgage and a monthly premium for at least the first five years (0.50 percent to 0.55 percent).

The bottom line: Any time you can get money upfront as opposed to waiting for it, it’s a good thing. Too bad I still own a condo in Knoxville, or else I’d be all over this.

ShareThis

The tricky thing though is not finding a place, but finding a lender who’ll give me the loan terms I want. I know the process, but in today’s market, things are constantly changing. One minute, the Bank of America rep is saying I need to put 10 percent down, the next minute, I have to put 15 percent down. Mortgage officers are still trying to figure things out.

The great thing is you can educate yourself as much as you can. FrontDoor’s Home Finance and Home Value Guide features tips and advice on everything from getting a loan to refinancing to buying investment properties. See the 5 strongest housing markets in the country and find out which remodeling projects actually add value to your home.

Buying in Manhattan is different from other markets mainly because buyers at my level are typically limited to cooperative housing. Unlike condos, in a co-op, you’re buying a share of the building, which is legally owned by a corporation. Most co-ops require approval from a board before you can buy in the building. You also are required to pay monthly maintenance fees that cover the building’s mortgage payment, property taxes, a property manager and any amenities. Learn more about the process in FrontDoor’s Co-Op Buying Guide.

So this weekend, I’m hitting the pavement and looking for a Manhattan apartment. Who knew?!

ShareThis