What Will 2012 Real Estate Market Look Like????

If I or any one could provide a definitive statement as to the health of the real estate market in 2012, we would be millionaires by end of the year.


As you may know, for the Hampton Roads market place,for example, home values were predicted at the beginning of 2011 to be down over 12%.  In actuality, values only decreased 4.8%.   A significant variance that may have caused many, even you, from taking the leap.
With rates at 4%, a $200,000 must fall to $144,000(30%) if rates move to 7%...7% is historically a good mortgage rate.


So if interest rates tick up(and they must evenutally), a buyer looks to  buy less house than they definitely can today.  A seller must expect to ask for less due to the buyer's restricted buying power.   Thus, the time to act is now.


This can be seen it this excerpt from a report from Jim Belote of Union Mortgage:

Of the 165 housing markets tracked by Zillow, 60 percent reported stable or appreciating home values in November. Notable winning locales include Los Angeles , Washington D.C, Miami , San Francisco , and Detroit .     The flow of private money into housing is also encouraging. We've noted over the past month that hedge funds, investing platforms for the wealthy, are directing more funds into housing stocks. In addition, Robert Shiller, co-inventor of the S&P/Case-Shiller Real Estate Index, noted at a recent American Economic Association function that the futures market for real estate (basically bets on the direction of home prices) is pointing to rising prices.    We expect interest in residential real estate to further bloom in 2012. Homes are enticingly affordable these days. U.S. Department of Housing and U.S. Treasury Department data show that home affordability is at a level unseen since 1971. In fact, median-income families today have double the funds needed to cover the cost of owning a home than they did 40 years ago. Historically low mortgage rates also contribute to the affordability quotient, and rates continue to skim along the bottom, as they have done for the past two months.     But rates aren't the only consideration in the cost of a loan. Fees come into play. Unfortunately, borrowers face higher fees in the near future. The guarantee fee on loans sold to Freddie Mac and Fannie Mae is set to increase a minimum of 10 basis points effective April 1. Many industry watchers, though, expect the actual cost to fall within the 20-to-80 basis-point range. The Summary to Jim's notes and my thoughts on 2012: Today, affordability is at a multi-decade high, and mortgage rates are at a multi-decade low. We see few economic reasons for anyone in the market for a mortgage and house not to take the plunge.      So what are                  YOU                                   waiting for???