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5 Real Estate Trends to Look For in 2012

Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:

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.

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

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 and do very well this year.

Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as industry leaders. These experts will dominate their markets.

This blog will help you with the what and the why. If you are looking for help with how to communicate this information to clients and customers, go here.

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13 replies
  1. Konorthmore
    Konorthmore says:

    Wow! I will surely look forward to these trend prediction of your for 2012. And my fingers are crossed that home buyers will have their great come back this year. I hope they realize soon that this can be the perfect time for them to invest in real estate property. Let’s just hope that the economy will continue to strengthen so the consumer’ confidence will boost, as well.

  2. Guest
    Guest says:

    these are great real estate predictions for 2012! This should really be the best time for home buyers to return. and to our economy, please continue to improve so buyers will be more confident to invest in house.

  3. FlanaganJim
    FlanaganJim says:

    Steve and Crew,

    Here’s the “Golden” question; WHEN will these “short sales” and “foreclosures” hit the market in 2012? We’ve been waiting and watching for them here in Ocean County, NJ, and the delinquency rate amongst home-owners here is actually down over the same time last year!



    • Anonymous
      Anonymous says:

      Hi Jim,

      There is currently a Supreme Court case in New Jersey which is about to be decided. The case will help define the proper process for foreclosures. Once that case is settled, the banks will have a blueprint for moving forward. The case should be decided within the next 60 days.

      Regarding delinquency rates, they are down in most of the country meaning there will be less foreclosures in the future. The current concern however is the amount of shadow inventory already in the pipeline. In both NY and NJ the supply is over 50 months.

      As soon as we hear about any changes in NJ we will alert the NJ KCM members. Prepare your sellers that this inventory will be coming in the first quarter of 2012. We can’t be any more specific than that.

  4. Michael Iossa
    Michael Iossa says:

    I think the predictions are right on the money. Buyers will be back in the market this spring and sellers will too. There’s an abundance of sellers who have held off putting their property on the market over the past few years until they “feel” that the market has stabilized. The addition of these properties will keep prices at current levels or even decline in certain areas.

  5. Patti Irwin
    Patti Irwin says:

    In Fountain Hills and Scottsdale AZ, the good homes are snatched up fast, just have to be priced right and in good shape. Unfortunately too many sellers are having a hard time adjusting to the current market and price their homes to high and then they sit. You are right about great agents needing to keep on top of the market and roll with the punches…the great agents are still making lots of money right now..


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