Experts see a bottom this year, followed by a gentle upsurge in home prices.
One fun part of ringing in the new year is placing bets on what it will bring. Collecting New Year predictions isn't as silly as it sounds; it gives knowledgeable players a chance to share what they know.
For those of us trying to gauge whether to sell, buy or rent in 2012, every scrap of wisdom helps. Here are predictions from a few trusted voices in real estate:
But Mr. Case points out that the data masks some signs of eventual recovery, says the Times. Here's Case's assessment:
Household formation is increasing and the vacancy rate is dropping, he said. Housing starts are at a 60-year low, and they've been there for three years. That's unheard-of. We're starting to see some signs of an increase in value.
CNBC's real-estate reporter is no economist. Olick's academic preparation consists of a BA in comparative literature and a minor in Soviet studies. But she's smart, her Realty Check blog keeps a sharp eye on real estate and she talks with the best analysts in the business.
Home prices finally hit bottom by late 2012 but not before dropping 5% more.
Plenty more homeowners will default on their mortgages, keeping a huge backlog of foreclosures looming over the market. (Of course a monkey with a Magic 8 Ball could have predicted this.)
Rents rise as demand for rentals grows.
Government makes no dramatic efforts to solve the housing mess.
Even the worst-hit markets will begin to see improvement by 2012, write Bloomberg real-estate reporters Prashant Gopal and Diana Holden. They, too, say prices will drop more before a turnaround begins.
Bloomberg makes predictions for home values in metro areas and each of the 50 states, including median home values predicted for 2012 and those in 2008, when the bust began, plus the percent of change expected.
Metro: Phoenix-Mesa-Scottsdale What a Home Will Be Worth in 2012: $141,859 Q4 2008 price: $169,000 Projected price change by MSA: -16.1% Projected price change by state: -17.2%
Metro: Warren-Troy-Farmington Hills What a Home Will Be Worth in 2012: $157,469 Q4 2008 price: $149,000 Projected price change by MSA: +5.7% Projected price change by state: +2.0%
Metro: New York-White Plains-Wayne (N.Y.-N.J.) What a Home Will Be Worth in 2012: $343,937 Q4 2008 price: $440,000 Projected price change by MSA: -21.8% Projected price change by state: -15.6%
The summary beneath the headline sums up Kiplinger's outlook: The bleeding is just about over. But don't expect a speedy recovery.
Writes the magazine:
The median home price in the U.S. has plunged nearly 40% in a little over five years, but the worst is definitely over: The market has finally wrung out the last excess valuations born of the housing bubble.
Assuming no further shocks to the economy (no safe assumption, given the fragility of the world economy) U.S. real estate will slowly work its way out of the red, Kiplinger predicts.
Among experts interviewed, Mark Zandi, chief economist at Moody's, says prices will drop no more than 3% to 5% in 2012, setting the stage for gains in 2013.
FoxBusiness interviewed John Lonski, chief economist at Moody's Capital Markets Group, who sounds bullish on housing:
Financially strong households that have spent money at Tiffany's and on cars are afraid of putting money in housing as they don't want to arrive too early, says Lonski. But we could be surprised at how vigorously the ensuing upturn of home sales becomes.
Prices will recover faster in cities with thriving high-tech industries. Among them: Silicon Valley and the San Francisco Bay Area; Austin, Texas; Massachusetts suburbs of Cambridge, Newton and Framingham; Rochester, N.Y.
REOs and short sales will become the new normal as banks continue to foreclose and dispose of the backlog of homes on their hands. Buyers will shift from considering whether to buy a short sale to understanding that they must be educated and prepared to do a deal with a seller, a bank (to buy an REO) or a hybrid of the two (to buy a short sale) to access the full selection of homes on the market.
Author:Kelly Olsen Phone: 201-669-7520 Dated: January 3rd 2012 Views: 1,844 About Kelly: Having the right real estate agent means having an agent who is committed to helping you buy or sell...
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