Check out this months Reality Check which takes a look at economists predictions for the housing market in 2012. Some notable highlights from this report:
Some top economists predict the worst of the downturn may be over and expect to see a gradual improvement in home sales and prices in 2012
Housing affordability is as good as its been since 1970 with reduced home prices and record low interest rates
Favorable market conditions and an improving economy are expected to lead to a 4-5% increase in home sales in 2012 according to National Association of Realtors (NAR) economists
Consumers should expect to see home prices gradually rise this year with inventory declining in many areas
Given affordable home prices and historically low interest rates, buyers should consider jumping into the market right away before rates go up and lack of inventory causes prices to rise, which some speculate could happen in the second half of the year.
It’s official. According to Freddie Mac, 30-year fixed mortgage rates have hit a low of 3.91%. What does this mean to you, you ask? Well for one thing, it means that you can refinance that old loan you took out on your house back in 1994 when rates spiked. It also means that those who have been on the fence about wanting to purchase a new home in 2011 have even more reasons to do so.
In my last blog post, I mentioned how the middle market was seeing some sluggishness as current home owners were wary of trading up for a larger home in the Bay Area market. Given where rates are today, those looking to ‘trade up’ should find the purchase a little less risky and perhaps in 2012 we will see some movement in the mid-range market which encompasses the majority of the Bay Area. Additionally, the first-time buyer market should see some good traction with new buyers able to take advantage of great rates and home values still below peak along with FHA loan maximums at $729,000.
According to an article today on CNNMoney.com “Mortgage Rates Hit another Record Low,” there could be even more reason to buy in 2012 as lenders may be loosening up on borrowing requirements a little bit during the year.
With more buyers in the market, those thinking about selling their homes should consider the beginning of 2012 to do so before a possible rate increase comes our way.
As always, if you have any questions about buying or selling your home, feel free to get in touch with me today.
Check out the link to this month’s Reality Check from Coldwell Banker which takes a look back on the housing market in the Bay Area in 2011.
Of particular interest is CAR’s forecast of new home sales in 2012 – which stands at a sluggish 1%. However, this forecast encompasses the entire state of California and given the dynamic Silicon Valley market, which is adding high quality jobs, one can only hope that the local market will outperform CAR’s prediction.
The market is also seeing strength in the luxury high-end home segment specifically in Silicon Valley, San Francisco and the Peninsula with many homes for sale receiving multiple offers. There was some noticeable distinction in the mid market, where there was very few homeowners ‘trading up’ perhaps due to economic uncertainty.
Some hopeful signs for 2012..
There seem to be fewer distressed sales
As buyers become more active in the market place and inventories compress, pricing has begun to firm up
Some banks have implemented procedural efficiencies for processing short sales, allowing for faster approvals
The news media has finally started to question if we have reached a bottom, which will hopefully boost consumer confidence
Here’s to hoping 2012 marks a true turnaround in real estate market in California and specifically and Bay Area!