There is a lot of buzz in the news about these two topics. Home sales are clearly up across the country. In our area there are multiple offers on entry level houses in good condition that are priced right.
Home prices have probably hit bottom. Buyers are out. Larry quotes some top level sources for his conclusions.
Housing Market: About to SPRING Back
I firmly believe that 2012 will be the year that home sales start to climb again. Over the past thirty days, more and more experts are saying the same thing.
Jamie Dimon, JPMorgan Chase CEO
“I believe we’re very close to the inflection point. People look at prices that are still coming down but all the other signs are flashing green… You could come up with a pretty bullish case (for housing).“
Frank Nothaft, Freddie Mac chief economist
“Even the housing market is showing some signs of shaking off the depression-like conditions that have plagued it for much of the past few years.”
“Stabilization in U.S. housing fundamentals is creating an attractive investment opportunity. Many of the ingredients are in place for continued improvement in housing.”
Lawrence Yun, NAR chief economist
“If activity is sustained near present levels, existing-home sales will see their best performance in five years. Based on all of the factors in the current market, that’s what we’re expecting with sales rising 7 to 10 percent in 2012.”
Having said that, I want to make sure that my readers realize that it will still take time for prices to begin to appreciate. Pricing is about supply and demand. Though demand is increasing, there is still a large supply of homes for sale in many markets and the National Mortgage Settlement will probably mean over a million distressed properties (foreclosures and short sales) will enter the market this year. Two major surveys spoke to this point in the past week.
The Home Price Expectation Survey asked 104 leading industry experts where they thought prices would be at the end of 2012. The average of those opinions showed that the experts believe prices will depreciation by about one percent (.72%).
The Urban Land Institute released results from their survey also. In their report, 38 leading real estate economists/analysts, representing major real estate investment and research firms, felt that prices would remain flat throughout the year.
Demand will increase dramatically this year. However, it won’t drive prices upward because of the supply of inventory for sale in most markets.