WHAT WE KNOW FOR SURE is that we’re experiencing historically low interest rates, and statically speaking, it appears that the market in our area is turning. Market experts Warren Buffet, Chris Thornberg, John Talbott are all saying it’s time to buy.
WHAT WILL 2012 BRING? So much is riding on shaky consumer confidence. Most likely, 2012 will see some small rises and falls throughout the year and we’ll end fairly even. Maybe we’ll see some appreciation overall. All that said, nothing is absolutely clear, yet. Here are some factors:
Reasons for a potentially rocky market
- Consumer confidence is coming back, but unsure. Any negative event, domestic or internationally, can cause uneasiness and send the buyers back into hiding.
- The distressed properties inventory (short sales and bank owned properties) brings the entire real estate market down. Bank owned properties are often stripped of appliances, fixtures, even carpet.
- Both short sales and bank owned properties carry risk and therefore, and that may translate to a slightly lower purchase price.
Reasons for potential price appreciation
- Inventory is shockingly low and expected to decrease even further due to many sellers who are unable to sell or not choosing to sell at the bottom of the market.
- Buyers are out in full force, the number of pending (under contract, but not yet closed) properties in December exceeded the number of new listings for the second month in a row. The last time such an imbalance occurred was in 2006, when the market was hot.
- Interest rates are at never-seen-before lows.