Forecasting and predictions from the National Association of Realtors for 2012, predicting a very small rate of improvement for the year, especially regarding home prices and sales as they are so intertwined with the health of employment levels in America.
A new report from the Midwest Real Estate Data’s Board of Managers forecasts similarly, putting forward a cautiously optimistic face, noting that most of the board believe the market may have hit bottom and that this year could mark improvement in housing.
Tom Guttilla, Owner of Coldwell Banker Today’s Realtors, sees the real estate market improving at a slow but steady pace. “Rates will stay at historic lows and sales volume is improving but is still at lower levels,” said Guttilla. “This, combined with the pent up demand from the last few years, should ensure future sales increases and improving values, but the latter only after inventories are diminished.”
Guttilla recommends agents aggressively market their listings, using technology to best do so affordably. “After the last four years, 2012 will be like a breath of fresh air,” added Guttilla.
Jim Haisler, Chief Executive Officer of the McHenry County Association of Realtors®, sees the outlook for real estate in 2012 as still struggling but improving. “I think signs are showing improvement but the foreclosures will continue throughout the year, even at a slower pace, which will keep prices low,” said Haisler. “Interest rates may become a factor as the economy improves, however.”
Haisler recommends that real estate professionals stay focused on their businesses and education, especially staying current on market trends and changes with lenders. “2012 will be a good year,” added Haisler, “but I think the longer term outlook is even better for the next three to five years.”
Anthony Trotto, Attorney and Managing Broker of Anthony J. Trotto Real Estate, believes there are opportunities despite continuing high levels of REO inventory. “The rental market is strong,” said Trotto. “Now is the time for buyers to really look at picking up some rental investment properties.”
Trotto recommends that real estate professionals educate themselves about the finance and mortgage industry and accept that we are not going back to the great years we experienced from 2001 – 2006. “For those who continue to operate under the premise the housing boom is coming back and home prices are going to sky-rocket again, this year will not be good at all,” added Trotto. “But for those who adapt and learn about where we came from so we don’t go there again, the year should at least be fulfilling.”
“We share a guarded optimism about real estate in general and our local markets in particular,” Russ Bergeron, Chief Executive Officer of Midwest Real Estate Data (MRED), the Chicagoland MLS told AGBeat. “We are seeing signs of an economy and real estate industry that are turning the corner. Looking at the overall numbers for our entire market shows a slight (+3%) increase in the number of sales in 2011, and a small decrease (-5%) in dollar volume sold when compared to 2010. The last 6 months of the year were even better – with each month showing a 13-26% increase in the number of sales, with 5 of the last 6 months showing a dollar volume increase of 5-16%.”
Bergeron added, “We are still faced with the drag of distressed properties. For example the average sale prices for traditional, short sale, and foreclosure sales respectively in 2011 were $274,000, $155,000, and $97,000. Of course these are generalities and each local market will differ. One interesting phenomenon that has occurred is within the rental market. One, as resale markets have dried up and lending has tightened up, the rental market has surged. Two, the interesting angle on this is that as the number of rentals has decreased, rent has been increasing which has resulted in the rent/buy decision approaching a stalemate because of the similarity in relative affordability.”
Concluding, Bergeron noted, “We will all need to prepare to prosper in the ‘new normal’ market. There is no going back to the boom years of the last decade.”