1. Buyers Will Return
In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.
2. Foreclosures Will Increase
The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area. Homeowners need to remember that until a home is paid for it is a liability not an asset. Owning a home for at least 7 to 10 years is still a prudent target for equity growth.
3. Prices Will Soften
As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:
- § They will eat up some of the buyer demand in the market.
- § They will impact the appraisal on ALL transactions in the area.
An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.
4. Short Sales Will Increase
As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.
5. Great Agents Will Be VERY Successful because….
Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition. Real Estate Agency is a full time profession with demands on the individuals who provide services that cannot be filled with part-time one-off deal makers. Consumers deserve a higher level of expertise than they have had in the past. It is time for everyone to up their game.
Those who put in the time and work needed to learn how to simply and effectively communicate the market to their clients and provide sound counsel will lead the industry. These experts will dominate their markets.