When identifying real estate trends, you may find yourself a bit discouraged. The market making a comeback is contingent upon finding a solution to the foreclosure issue, which is keeping prices low and buyer confidence even lower. And according to a report published by Standard & Poor’s, home prices will fall an additional 7 to 10 percent throughout 2011. But there are a few trends to watch in 2011 that brighten everyone’s prospects.

1. McMansions are McOver
One of the biggest real estate trends seen lately has to do with taste and logistics. Not only are empty nest baby boomers leaving behind their high-maintenance properties for urban center lofts and apartments, but the younger generation of home-buyers doesn’t want Mom and Dad’s giant prefab home in the suburbs. They want smaller, vibrant, walk-able neighborhoods with community amenities like local shops and parks. This means larger homes could sit on the market unwanted for a very long time.

2. Home-buyers want longevity
In the past, a couple would buy a “starter home,” and upgrade after a few years of investing equity. Now, a first time home-buyer is planning to stay in their home a minimum of 10 years. The home is a home in the original sense, not just the housing boom “investment” of years past. Repeat buyers are looking for 15 years or more in their next property. This is one of the real estate trends you can expect to see more of in 2011.

3. More Foreclosures Coming
While they slowed down in October thanks to the “robo-signing scandal,” according to the Board of Governors of the Federal Reserve, there will be 2.25 million foreclosures in 2011 — the same as 2010 — and another 2 million in 2012.

4. Rates stay low while lending gets harder to come by
According to the Mortgage Bankers Associates, included in important real estate trends for 2011 is the expected increase of fixed mortgage rates to 5.1 percent by the end of the year. This is due in large part to the Federal Reserve buying $600 billion of Treasuries to keep interest rates low and boost economic growth. As great as that is for a buyer, the recently raised lending standards have made it harder to get financing. While some argue this is holding back the market recovery, others consider it a necessary evil. Over-extended buyers that were given loans exceeding their means by irresponsible lending companies caused much of the housing crisis. Tightening the standards is a logical backlash to this practice and it’s dire consequences.

5. New construction stays low
The effect of the current market’s real estate trends are felt nowhere harsher than in new construction. The combination of unemployment, plus an influx in inexpensive foreclosures and short sale properties means fewer new homes need to be built to accommodate demand. In 2009, only 550,000 new housing units were built, compared to 2.1 million units at the peak of the housing bubble in 2005. Unfortunately this could mean a housing shortage in the near future.

6. Cash is King
Just like last year, investors with the capital available have a major advantage with all the current real estate trends. So many banks are holding so many foreclosed properties that all-cash offers are frequently being accepted over higher offers involving loans. For a traditional homebuyer, this means all offers must be made as attractive as possible, including large down payments and often making an offer close to or above the asking price.

If you are planning to invest in Manhattan Beach real estate, you should research real estate trends and inventories in the area to understand the direction of the market. When you research housing trends, you should look further back than just a few months. Historical trends will give you a long-term perspective to make a more informed purchase based on current median prices and inventories available in the Manhattan area. The median price and inventories reported are based on active listings on the market. By understanding when the market peaked and how the market has performed since it peaked, you can understand what to expect when buying Manhattan Beach real estate.

Trends at the Height of the Market in 2007

In August of 2007, the median price of real estate in Manhattan Beach peaked at $2,190,000. One of the main reasons for the peak median price was because the inventory in Manhattan Beach reached as low as 100 properties. Historically, when home inventories in a region drop, the price of the properties in the area will increase in value. After the housing market bubble burst, this historical trend has not held true. Now in 2011, Manhattan Beach real estate median prices have dropped and so have property inventories. With low sales prices and low inventories, it has turned into a buyer’s market.

Current Inventory and Median Sales Price Trends

After the median price of home bottomed in March of 2011 at $1.558 million, the average price of Manhattan Beach real estate is now rebounding steadily at around 8 percent. The median price as of August 26 of 2011 has climbed back up to $1.726 million, inspiring more homeowners to put their homes on the market. In March of 2011, the average inventory of properties on the market was reported at a low 110. Just five months later, sellers are starting to see the growth in the media home price, which is encouraging them to place their home on the market as an active listing. The current home inventory in Manhattan has climber to 145 because of the steady 8 percent advance in median home price.

What Will Play Into Future Trends?

A number of different factors will influence future Manhattan Beach real estate trends. The most significant factors to consider are: interest rates, property inventory, unemployment, job opportunities, and community development in the area. If you are trying to predict the market’s next move, it is important to understand how unpredictable real estate can be. With the Fed trying to balance the economy and the Treasury Department trying to fight inflation, governmental decisions can influence the market up or down depending on the needs of the nation.

Manhattan Beach real estate sales have raised steadily for the last five months. As the median price increases, the inventory has gained ground, as sellers have grown more confident with the price advance trend. Review median price and inventory trends to influence your purchasing power and make a wise investment.