Real estate experts are predicting that the recovery phase of the Housing Bubble will begin in 2012. The real estate housing crisis will not be completely over this year, but there is some relief ahead.
This recovery phase could lead to a stronger U.S. housing market than we’ve seen since the crisis began in 2006.
5 Predictions for the 2012 Real Estate Market
- 1. Foreclosures and Short Sales
Contrary to popular belief, America’s foreclosure crisis has not ended yet. At the end of last year, a few big lenders made vows to temporarily stop foreclosure proceedings for the 2011 holidays. Many of them resumed foreclosing on distressed properties on January 2, 2012, as thousands of them already had auction dates scheduled. The 2012 predictions is that these foreclosures will cause an abundant amount of REO properties to flood the housing market. In many cases, the fastest, easiest way for the lenders to dump REOs in by selling through short sales.
- 2. Buyer Confidence Affected by Election Year
As we all know, 2012 is an election year. Just like any other election, political parties will be making confident sounding speeches all the way up to election day. They will say whatever they feel necessary to try to make us believe they have everything all under control, including the housing market. But, with all that the market has been through since 2006, voter confident will remain low until the election determines who will be in charge. Without much certainty regarding taxes, the job market, educational expenses, even mortgage interest rates, many will continue to be uncertain about homeownership.
- 3. The Mortgage Interest Deduction
This was a deduction that was truly needed by homeowners as the housing crisis peaked. These tax breaks were able to help sellers who lost substantial amounts of money because they were forced into short sales. Then, there were the homeowners that were able to keep their homes, but not without many sacrifices and much struggling. Not to mention, there are still, literally, thousands of homeowners still in distress at the present moment. This very needed deduction is a major topic within the government, as many politicians are ready to kick it to the curb. This could really put a strain on a market that is just starting to recover, as thousands of homeowners still desperately need this deduction.
- 4. Mortgage Interest Rates
Mortgage interest rates are expected to stay at record lows throughout 2012. Since it’s impossible for a complete recover to occur before year’s end, rates will have to stay low. This is how the US government will continue to encourage homeownership. Low interest rates make it possible for more Americans to afford the cost of a mortgage. This encourages more of us to give homeownership a try, even with the job market still being so unsteady. Everyday that a foreclosure remains vacant, the more money the lender owning it loses. Affordable mortgage interest rates raise the chances of banks being able to find qualified buyers for their REO properties.
Our Recovering Housing Market
It’s important to understand that the American government controls the way mortgage interest rates fluctuate in this country. As of now, these rates are at record lows. This is one of the biggest reasons for the buyer’s market we are currently experiencing. After five years of non-stop foreclosures across the country, this is great news that encourages homeownership again. If we could just find a stable point between our unstable job market, and recovering housing market, our country could be back on track sooner than we think.
Article provided by Vickie Nagy. Vickie is a Dublin CA real estate agent and services both buyers and sellers. If you’re looking to buy a second home in a luxury market, you can visit Vickie’s website where you can search all Pleasanton CA real estate and Livermore CA real estate.