My Annual 10 Real Estate Predictions for the Upcoming Year

A simple answer to any questions about the real estate market in 2012 is: If you want to know what the housing market will be like next year, ask the government. At this point, low mortgage interest rates only exist thanks to its efforts and job recovery is essential to real estate recovery.

But if you were to ask me, I predict:

1.  Foreclosures and short sales will play a key role in U.S. housing.  The U.S real estate market is poised to be hit by another surge of bank repossessions.

2.  Buyer confidence levels will remain low due to election-year mud-slinging. 

3. Expect a fight over the home mortgage interest deduction.

4.  Rates will remain low through the year. 

5.  Builders will begin building…slowly and cautiously…and their primary pool of buyers will be those that have sat on the sidelines and now believe that if we are not at the bottom, we are close enough to make a move without significant negative consequence…especially considering today's prices for new construction.

6. Many lower end move-up buyers will remain cautious, wary of further market reductions and/or fear of job loss.  Consumer confidence will be tied to unemployment numbers.

7.  We will see a rise in home sales in terms of units sold.  The baby boomers began turning 65 in 2011, which will cause a rising number of retirement-driven listings.

8.  There will be little or no appreciation in home values.

9.  Homebuyer's real estate tools will become even more mobile… everything from smart phones, iPads, netbooks, portable scanners, e-signatures and more.

10.  On the commercial front... retail, office and industrial vacancies will decline as more tenants seek, and receive, landlord concessions.

All in all, I predict a slow and steady recovery in real estate for 2012.  Consumer confidence is the key to a turnaround in the market. The government has to stimulate the jobs recovery and when it does, the real estate market will follow.

Have a great year and remember this...2012 may be the BEST year ever to buy a home, with incredibly low interest rates and property prices.  Don't be one of those that in 2013 or 2014 says: "I remember when I could have bought that home for $X" or "I missed the opportunity of a lifetime in 2012."

Best regards,

Jay