2012 set to be More Challenging Year for Real Estate Sales
Stats reported by Realtor.org show housing affordability is about to decline. Sales of new construction, single family homes is expected to jump from 303,000 units to 380,000 units nationwide. US Housing starts are expected to grow from 560,000 units to 632,000 units next year.
Sales of existing homes is expected to rise slightly as well from 4.91 million to 5.15 million units. The whole of the market is being held back by a glut of foreclosed homes held by the banks. It’s estimated it will take several years for this volume of homes to be absorbed by the markets. And, the foreclosure process is taking even longer to play. Some states see the whole foreclosure process taking 3 years. Few will want to wait that long to buy a property and if it’s a good one, there will be plenty of offers pushing the price up.
Shadow Housing a Big Problem for Realtors
The key task for many real estate agents may be in selling homes that are better than the remaining foreclosed homes. The problem here is that new foreclosures are rising across the country. According to Realtytrac, the number of U.S. homes receiving a first-time default notice from July to September quarter increased 14% compared to last quarter. This was the first increase after 5 consecutive quarterly declines.
Still short sales are a pain for buyers who may not want to wait one year to buy a house that might need cleaning and renovation. Most foreclosed buyers wreck their homes before they leave them, which means there is further cost for buyers. Banks may be dumping foreclosed properties on the market now and turning up the heat on borrowers in default, but consumers may not be anamored of what is available and the problems the banks pose in taking offers.
Unemployment is another factor that will curtail demand in 2012. See what Yahoo finance has to say about the year ahead in real estate.
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Read about Realtor.ca, and about the best iphone, ipad and android apps for Realtors.