After an up-and-down year which saw sales, and optimism, surge in the spring only to suffer setbacks in the fall, Realtors, brokers and others on the residential side of the market are showing guarded optimism for 2011.

More than 60 percent of respondents to a December Banker & Tradesman reader survey, conducted in conjunction with Sudbury-based Bannon & Co., expected moderate improvement in the overall economic outlook for next year. A further 22 percent said they expect the climate will be about the same as 2010, and only 15 percent fear it will decline.

Respondents were split on the chances of improvement in single-family sales, with 45 percent of respondents forecasting a modest increase in sales, while 38 percent expect 2011 to be about the same pace as 2010.

But reader expectations for condominiums were more subdued, with only 28 percent of respondents expecting a modest increase in sales, while half of readers thought condo sales would remain about the same as 2010. Multifamily expectations were a little brighter, with about 44 percent of readers expecting an increase and 40 percent expecting them to be about the same as last year.

A Cresting Wave

That could be because brokers and agents sense the wave of foreclosures afflicting the multifamily housing sector in 2010 may have crested, said Kevin Sears, broker owner of Sears Real Estate in Springfield and outgoing president of the Massachusetts Association of Realtors (MAR). Though he said he believes multifamily properties may be through the worst of the foreclosure crisis, he said he’s “not sure the single-family wave has crested,” with delays in short sales and foreclosures still plaguing the market.

“Those delays will only prolong the foreclosure agony that we have,” Sears told Banker & Tradesman. “On the flipside, when you look at the distressed properties, it does continue to create opportunities for folks at lower price levels.”

Most readers agree, with only about 17 percent of respondents forecasting a decrease in foreclosures. Roughly one third of respondents expected rates to remain about the same as last year with slightly less than half expecting a moderate or substantial increase.

Last year, agents expressed widespread dissatisfaction with the short sale and foreclosure process. But with more experience under their belts, agents are getting better at coping with the challenges presented by distressed sales, and some said they have seen some improvement in processing time on the part of banks and lenders.

Still, “we have a long way to go,” according to Laurie Cadigan, broker-owner of Barrett & Co. in Concord and 2011 MAR president.

“We’re still struggling with getting short sales closed in under six months, and that’s very frustrating to buyers,” Cadigan said. “In communities where there are good amounts of short sales and foreclosures, that stagnates the market.”

The vast majority of readers said they think distressed sales will continue to affect the market over the next year. More than 70 percent of readers thought it somewhat or very likely there will be an increase in short sales next year, while 76 percent thought it likely there would be an increase in REO sales.

‘A Normal Market’

Considering the ongoing concerns with distressed sales and sharp year-over-year drops in sales figures over the last few months, one might expect some pessimism regarding 2011 sales. But most residential real estate professionals seemed sanguine about the drops, attributing them to the distortions caused by homebuyer tax credits, which boosted sales in late 2009 and the first half of 2010, particularly among first-time buyers.

“I’m looking forward to a normal market,” said Carol Bulman, CEO of Norwell-based real estate heavyweight Jack Conway & Co. “[The credit] threw things off quite a bit this year. The big wave comes in and then it recedes, and the wave threw us off so much it really put us off our forecasts for the rest of the year.”

Rick Loughlin, president of Coldwell Banker Residential Brokerage in New England, even expressed some optimism that a strong showing in early 2011, in comparison to the tax credit-puffed numbers of 2010, will prove a sign of continuing stabilization and strength in the market.

“The first six months of last year are what we’re really going to be watching, how are we going to against those numbers in [2011],” he said.

Despite the difficulty in seeing into the future, most readers were optimistic regarding their own prospects. More than half – 58 percent – of readers expected that their business would see a modest increase in sales, and 62 percent expected to recruit sales staff over the coming year.

“I don’t have a crystal ball,” Sears said. “Not knowing a few things that are going to happen with the greater economy, it makes me a little cautious, but I think the market’s in a strong place to have a good 2011."