Didn’t you know that you have to hit rock bottom before things start to look up? It’s the same with most things, including the housing market. Even as we welcome the New Year, it still looks like in 2012 the housing market will continue to struggle in most parts of the country.
Experts have been telling us all through 2011 that we were seeing what was the bottom of the housing market, but were they wrong? Those same experts are now telling us that housing prices and sales won’t be moving up for some time. Not such great news for anyone wanting to sell his or her house and move into a new one right after the New Year.
There is good news for 2012, however! The housing market is definitely moving in the right direction; it just isn’t moving fast enough. Think about it this way: at the end of 2011, home values are likely to go down by about $6.81 billion. If you look at what we lost at the end of 2010, it’s much better (it was about $1 trillion back then.)
What the experts are telling us to expect in 2012 is a very slow recovery for home prices. So, while home prices will continue to move up in value, it won’t be too quickly. There are just too many undervalued houses out there on the market as it is. As long as those home prices stay at the low end, the market won’t recover too quickly.
Unfortunately, 2012 won’t bring any newfound confidence either. Real estate agents across the nation have been working through pretty stressful situations. Many homes are sold through short sales, where the homeowners actually owe more to the bank than what the house is worth. A short sale is just an attempt to get out of the bad situation before it moves into foreclosure.
Though there isn’t a lot of good news to ring in 2012 with, there is some. Many cities across the nation are closing out 2011 in just the right neutral zone. That means while there aren’t too many increases in home prices, people are selling and people are buying. So the market is moving. As long as there are buyers out there, we can hope for the best. Look at it this way: for every three or four foreclosed homes, about one house is sold. In 2012, experts are hoping to see this ratio increase even more.
The key to ringing in a Happy and Healthy New Year is to stay positive. If you aren’t in a rush to relocate, don’t. Hang on to your house until the market at least stabilizes a little more, then put it on the market. Good luck in the New Year!