As we progress into 2011, it is good to recall 2010 and compare the markets, identify the differences and estimate the challenges. This article will focus on two comparisons.

First, Newport Beach Top 10 companies, since it is the dominant high-end real estate market in Orange County and therefore should be a great example of our local markets.

And second, the overall Orange County Top 10 review.

Remembering that 2010 had an optimistic upstart, and that 2010 was boosted by buyer tax credits, the comparison could be skewed, given the somewhat unusual start and then abrupt drop off in April 2010 — where fear reversed any momentum for the first 4 months.

However, there is still a comparison that will relate to future averages going into 2011 and it’s well worth watching as progress through the year.

January through February 2010 had optimistic numbers that outpaced expectations, whereas Newport Beach Top 10 companies experienced $291 million in gross volume. That equated to 262 units or sides. The average price was close to $1.13 million. A unit or side is defined as being one buyer or seller.

January through February 2011 was a bit different, but that doesn’t mean the market failed. Generally, we experience a slow start to our seasonal sales, which usually begin in March, therefore the numbers, although different, should not cause fear of a failing market. Recovery comes in different measures, and the real story will unfold in April as our seasonal sales reveal the true market prediction.

January through February 2011gross volume was $204 million with 208 total units with an average price of $983,351. These sales numbers reflect a reduction in units of -20.62% and an average price reduction of 11.64% over the same period in 2010.

Let’s analyze this correctly. The drop in price does not reflect a reduction in home values, but merely a drop in the level of high-end homes that were sold. That means more multimillion-dollar sales occurred in 2010 than in 2011. The drop in units is expected, given that the normal sales numbers for January and February are in line with expectations.

As I explained, the local real estate market begins in March and continues briskly through the end of July. Our follow-up on these trends will reveal the true story of 2011’s expected recovery. Stay tuned for this update as the year progresses.

Orange County’s Top 10 brokerages, from January to February 2010, produced $795 million in gross volume with 1,237 units or an average price of $643,066. January through February 2011 had a total gross volume for Top 10 brokerages of $681 Million, with 1193 units for an average price of $571,086.

Therefore, 2010 to 2011 sales units for January through February were down by -3.56%, seeing a price adjustment of -11.20%. That equated to a volume adjustment of -14.36%.

The Orange County comparison is different than our local Newport Beach market. But it gives some comparison to the price, whereas the buying trends of both the total market and our local market are apparently similar. Both show a decline or purchasers price lines by about 11%. That means a buyer purchased a lower cost property but not necessarily a property that dropped in price.

Now the real news. These comparisons, along with the increase of the 10-year bond, including an increase in interest rates of about 1% since October 2010, should give consumers an indication that as interest rates go up, their leverage goes down.

This could also mean that buyers who could purchase $1 million properties are now qualifying for $900,000 properties to offset the impact on qualification or payment from higher interest rates. The media will use data like this to tell a story that the real estate market is retracting, however, this could result in a different view of those results.

I look at the optimistic view of the real estate market. Figures can tell stories but regardless of the outcome of the math, only you can make the decision. It supports that no matter what the publications say about real estate, always look at different views, and attempt to analyze this market both from statistics and from leverage.

Money is money. As always contact your real estate professional to discuss your opportunity.

*Data and compilations provided by Benutech Inc.

TOM IOVENITTI is the former president and chief operating officer of Coldwell Banker. He lives in Newport Beach.