Predicting the way the real estate market is headed in 2012 is not simple. Of course, this will stop analysts at investment banks and financial institutions from predicting their ideas.
The recession is still present, a possible economic meltdown in Europe, and the US presidential race all point to a dire real estate market in 2012; however, hope is still present according to analysts. A complete recovery is not close but there are a few indicators that are on the positive side.
What to look for during 2012 includes:
Increase in rental properties – In 2011, there were more rentals seen in the market and that trend will be present in 2012. Vacancy rates for the third quarter of 2011 showed a decrease with a nationwide average of 5.6 percent with an increase in rentals of 3.6 percent.
Developers noticed the trend, which brought construction of rental properties up 33 percent across the nation during the 3rd quarter of 2011 with 48 million new properties.
Owning and buying rental property is a good investment for 2012 as the prices are still low and the demand is high.
Shadow inventory – The threat of decreased property values and more homeowners being underwater are at the top of concerns and place more homes in what is known as shadow inventory. Shadow inventory are homes that have been foreclosed but not on the market, homes under foreclosure, and homes in which the homeowners cannot keep up with mortgage payments. These three factors will reduce property values even more and lower the demand of buyers.
Short Sales Rise – Analysts have stated that home prices will be on the decline during the first 6 months of 2012. This will put homeowners underwater, which often causes people to default on their mortgages. Due to this, banks will suggest short sales to their mortgage holders.
Europe financial meltdown – if this crisis continues it will have a large effect on the American economy. The reason is that exports are close to 2 trillion dollars each year from the US to Europe. If Europe goes into a recession, the demand for American goods will decline which will lead to lower demands for office and industrial space in the US.
Unemployment – The unemployment rate of course has quite a bit to do with the overall real estate market in the United States. Analysts believe the average will remain high put do believe improvements will be seen – slow and steady. December 2011 saw a three-year low of 8.5%, which is a good sign. It is estimated by analysts this number will soon be 7.5 percent. If the job market improves, then housing markets in those areas across the nation with lower unemployment will also improve.
Commercial Real Estate – companies did not expand in 2011 so commercial properties saw a decline during the year. Steve Hentschel, head of Real Estate Banking at Gleacher and Company stated, "There will be a continued emphasis on major market 24/7 cities that have global appeal." The cities predicted to see growth in 2012 include Chicago, Atlanta, San Diego, and New York.
San Diego Homes Outlook
The San Diego homes outlook is looking much better. San Diego may have a ways to go, but things are certainly looking up. As noted by PricewaterhouseCoopers and the Urban Land Institute in their report, Emerging Trends in Real Estate 2012 Forecast, San Diego is listed in the top ten "real estate markets to watch in 2012" and went on to explain, "San Diego benefits from the near-perfect year-round weather, which helps attract talent pools to local biotech companies, as well as a steady stream of upscale retirees."
With historic low mortgage rates this could be your best time to start looking at all the available San Diego homes for sale with one of our helpful and courteous Realtors. Call (888) 865-5055 toll free today!