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Real Estate: Sales Increasing. Prices – Not Yet.

In yesterday’s blog post, we explained that many experts believe home sales will increase in 2012. Today, we want to make sure that our readers realize that it will still take time for prices to begin to appreciate. Pricing is about supply and demand. Though demand is increasing, there is still a large supply of homes for sale in many markets and the National Mortgage Settlement will probably mean over a million distressed properties (foreclosures and short sales) will enter the market this year. Two major surveys spoke to this point in the past week.

The Home Price Expectation Survey asked 104 leading industry experts where they thought prices would be at the end of 2012. The average of those opinions showed that the experts believe prices will depreciation by about one percent (.72%).

The Urban Land Institute released results from their survey also. In their report, 38 leading real estate economists/analysts, representing major real estate investment and research firms, felt that prices would remain flat throughout the year.

Demand will increase dramatically this year. However, it won’t drive prices upward because of the supply of inventory for sale in most markets.


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3 replies
  1. Michael Iossa
    Michael Iossa says:

    The towns in Morris and Somerset County NJ, particularly those along the Mid-Town Direct train line, have seen a very busy spring market thus far. Houses which are well maintained, updated and priced correctly continue to sell in a reasonable amount of time which is 108 days. Inventory vs Supply ratio is about the same as last year. The overall average sales price is down about 15% YTD. 

    Reply
  2. Jean
    Jean says:

    Oakland County Michigan is seeing a very low inventory. The “move-in ready” homes don’t last a week in our market and generally receive multiple offers over asking.  Distressed properties, short sale and foreclosures, are selling as fast.  The Fannie Mae properties with their 14 day “First Look” program that excludes investors from offering on properties for the first 14 days has shrunken the available “investor” properties to almost non-existent.  Appraisors are bringing back values for the most part that match the slow but steady increase in sales price. 

    Reply
  3. Craig Fuhr
    Craig Fuhr says:

    Wow. Can’t believe my little site at http://craigfuhr.com/housing-market-recovering/
    trumped KCM. You guys are so spot on as always with this post. Its clear that sales are defininitely brisk right now (especially for nicely rehabbed houses), but prices are FLAT as Columbus’ earth!

    Reply

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