The year 2011 was quite a good year for the real estate industry, even with the market quite falling and with home value in pitfalls. But if you think that is already a worst scenario, then think again – we might experience the worst scenarios as 2012 enters.
There have been a lot of predictions and analysis shared online and distributed to people, especially to real estate individuals. This is not to discourage them, but only to let them know what to expect this New Year. Well, housing bubble in 2011 has been a wide issue, with mortgage and fair housing being affected, US homes being foreclosed and a lot of people being in great problems when it comes to their loans. Home values going down, real estate market falling and failing, etc, etc. A lot of bad news and event happened, but despite of that, we hold on and hope for the best. Real Estate School in Texas continues to offer their courses and still a lot of individuals enroll on it. Other than Texas, some of the most booming (or quite booming market) in the US continue to offer such courses and continuing education. This only means that despite of the downfall, there are still many of us that are optimistic and eager to really pick the market back.
With an aim to help readers, we summarize some of the predictions and analysis that we had read before the year ends. It is your own discretion then on how will you understand or use what we share for you to be able to step up with a new gear this New Year in the housing market.
Home Prices Continue to Decrease
This does not mean in general. Economist and other experts say that in some places/regions, home prices will continue to drop, and some will stop. This may only mean a start of recovery in the whole year of 2012. Though experts point out that there is still a continuous falling in home prices, they claim that before the year ends, and as 2013 enters within 12 months, they expect a modest bump on some markets; “some markets” because they see only other markets continue to recover as early as 2012.
Frank Nothaft, Freddie Mac’s chief economist says in a statement, "Some markets have appreciated over the past year and are likely to gain further in 2012, while those markets with higher vacancy rates and relatively large distressed sales will continue to see downward price pressure over the next year."
Some markets will expect more Foreclosures
With some market barely recovering, experts say that there will be an increased number of foreclosures in these struggling markets. As foreclosures continue, it is likely to contribute to further decline in housing prices and values on those areas.
Lower Mortgage Rates in 2012
2012 is another expectation for lower mortgage rates. This is due to a commitment from Fed’s in keeping a low interest rate for mortgages. Experts say that low mortgage rates may last on the whole first quarter of the year, and expect quite some changes on the next quarters of the year.
Housing Rentals to Go Up
Since many foreclosures are more likely to happen in 2012, experts say that there will be an increase in rentals of houses or apartments. But – this may mean good news for some real estate investors. Real estate investors may convert their properties into rentals.
“Rising rents have traditionally been a good factor for home sales. Also, with rental demand heightened, real estate investors' ears have perked up. With prices in many metro areas at historic lows, investors are taking advantage and scooping up properties to convert into rentals.” (Lawrence Yun, chief economist at the National Association of Realtors)
No one can actually tell exactly what will happen in the real estate market as soon as the 2012 year enters. With lots of real estate investors, professionals and newly license individuals, this year would be another year of competition and brain-storming for the whole industry. In the least effort, we should always be optimistic and always hope for the best for us to cope in our depressed market condition.
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