2012 Housing Market Analysis
When developing a housing market analysis for 2012, U.S. homebuyers can be forgiven for thinking they’ve gone through hell and back in the last seven years. The U.S. housing market has seen itself go from the ridiculous highs of 2007 home prices to bottom of the barrel market gluts in 2009. Going into 2012, people are tired of seeing their home values flounder underneath their mortgages. Bank managers are wondering when they will ever get rid of all the inventory of foreclosed homes they have on the books. And the few new buyers who actually have money to buy are like kids in a candy store with all the low prices available on prime locations.
Potential Signs of Improvement
Any good housing market analysis has to look at both sides of the picture to reflect a true evaluation.
On the optimistic side, a number of economists and market watchers are now carefully treading onto the ice, making statements that the U.S. housing market may be turning around. The 2011 annual figures have shown the highest improvement in units for sale and transactional turnovers since 2007. That said, there is still plenty of room for improvement. A health national market moves 6 million homes annually. The current market closing with 2011 moved 4.4 million units, many of which were foreclosures or short sales.
The above said, many pessimists still note that banks are sitting on large inventories of unlisted homes, not wanting to sink the current housing market any further. Because of this fact there is still far too much supply available for the demand that exists in terms of buyers. To make matters worse, banks continued to constrict home lending to only those borrowers who can almost buy a home outright with cash, blocking out plenty of viable buyers. Finally, the labor market is not replacing many of the jobs lost in 2008, also permanently keeping buyers out of the market who then can’t generate income to buy a home. Not surprisingly, the pessimists have a darn good argument.
Experts continue to use language like “we’re very close to the bottom” or “there’s hardly anywhere for the market to still fall,” but what really has people talking is when population figures begin to rise in markets. That sort of trend signifies permanent moving into neighborhoods and buying of homes. With the arrival of June 2012, the current housing market is now in its proving ground with the warm days. The summer tends to be the best time to sell because of nice weather and people taking time off from work. How this summer shapes up will be telling about how the rest of 2012 will perform overall.
States Showing Mixed Signals
It's hard right now to make any kind of a definitive housing market analysis conclusion. Various markets nationwide are showing improvement, despite the factors arguing for continued depression. Utah is seeing population growths consistent from year to year. Ohio is discussing the potential of finally seeing rising home prices as well. On the other hand, California and Florida representing the worst hit markets are still floundering. So 2012 is being carefully watched, but few are coming out and declaring the recession over. With a presidential election in play, things could still go south again. That’s what happened after the Bush vs. Gore election in 2002.
For buyers, the market is great. Mortgage rates are low, prime locations are available, and if lending can be obtained this is the best buying time ever. For sellers, there are potential signs 2012 may slightly improve things, but any big upturn will still be years ahead.
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(creative commons photo credit: 401K 2012)