The question I have been asked most often in the last few weeks is: What is the outlook for the real estate market in 2012?
It’s an interesting question, because there are many dynamic factors involved in the state of housing in North America.
First and foremost are the immutable laws of supply and demand. If there is more product than there are consumers, the market will continue to decline.
And while we can’t change the rules of the axiom, we can certainly control the variables. Either the supply of homes for sale has to be reduced or the number of buyers has to increase, a bit of both would be great.
The best way to increase demand is to make mortgages easier to obtain. We don’t want to return to the debacle of the early 2000’s but a little sanity in the underwriting process would help.
Many consumers with good credit scores want to buy houses but they can’t because of guidelines that have caused such trepidation regarding default that the money is kept safely tucked away and out of the hands of would-be buyers.
Alternatively, we need to figure out more ways to keep people in their houses that want to stay but have suffered a financial or personal setback. The flood of foreclosures continues, and many of the displaced homeowners that I have spoken indicated that they tried to work out an arrangement with their mortgage holders but were unsuccessful.
Unfortunately, nothing has been done to significantly affect real estate in the upcoming year. And so any real estate recovery is totally dependent on the economy as a whole. As the economy goes, and as jobs are created, so goes the real estate market.
And since 2012 is an Presidential election year, one should expect some temporary economic remedies being set into action to skew the numbers by November.
As a result, the real estate market should fare slightly better in the second and third quarters of 2012. The market will be far from robust, but it will be a bit stronger than 2011.
2012 offers some promise for better times ahead. However, just how much better it will be is still anybody’s guess.
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Richard: I happen to think that the first quarter of 2012 will show us a big increase in sales---from an inventory point of view, we have nicely cleared out most of the short sales that were plaguing us earlier in 2011. I agree with you regarding the statement about the electionin November!
Richard, Northern Virginia market has held strong for past couple of years. I do feel the start may be bit sluggish but hope to pick it up in 2nd and 3rd quarters. Last quarter being a election year is going to be very interesting.
Paula...
Unfortunately, in Coweta County GA we had over 200 foreclosures last month, and another batch set to go on the steps next Tuesday. There is also a lot of shadow inventory in our region so any recovery at all will be short-lived here. THX.
Ritu...
Most areas that involve federal workers enjoy the stability offered by a seemingly endless flow of borrowed money spent by the government. Very few regions are so fortunate. THX.
Richard,
2012 will be as difficult to forecast for real estate as the last few years have been. Maybe more difficult with the Presidential election thrown into the mix.
Rich
Good morning, Richard. While no one has that crystal ball to foresee the future, we can make it what we want it to be...
2012 is going to be a good year in real estate. I can feel it!
Good morning Richard,
2012 is going to be an interesting year - the successful will be those with the most focus and ability to ride the waves in the turbulent sea.
Have a Happy New Year!
2012 election year, so the politicians might actually listen to us, call them.
http://activerain.com/blogsview/2618619/hey-d-c-let-s-talk-turkey-
Good morning Richard,
I agree with your thought process. I do believe we will se an increase in 2012, but by no means are we out of the woods. A crystal ball would be priceless about now!
First, I love the nostalgic picture. It is always interesting to hear what others believe we will see in 2012...
Richard..I personally hope the government stays out of it. I see a rebound in many areas of my state and if teh government throws in some incentive baloney it will screw thing sup like it did the last time.
Richard,
And predicting the future is not something I do without my crystal ball and unfortunately it is broken...
Happy New Year,
Ann Hayden in Wildwood, MO