Although 2011 has proven to be the worst year on record for new sales homes-302,000 new dwellings were sold last year, down from 323,000 in 2010-many experts say a slowly improving job market will help improve the residential real estate market in 2012. The numbers in Illinois seem to point to the beginning of a turnaround. As 2011 ended, housing sales in the state began to rise. The Illinois Association of Realtors (IAR) reported that over 8,800 homes were sold statewide in December of 2011. That number is up 14% from December 2010. In Chicago, December 2011 home sales hit 1,536 units. This number is up from December of 2010 by 6.4% percent.
Experts say informed and savvy consumers and investors recognize there is great opportunity in this market and these astute folks are leading the way to recovery.
There are some interesting predictions and considerations for 2012:
- · Mortgage interest rates will continue to stay low, while home prices stabilize and start to rise. Thirty year interest rates are at the 1949 levels, which make borrowing money to finance a house or condo hugely attractive.
- · Look for both increasing home sales and rising foreclosures as distressed properties make up about half of all sales.
- · The short sale process will improve to help avoid foreclosure but the nation’s homeownership will continue to fall.
- · Foreign and domestic investors will buy 25 percent of the homes on the market, taking advantage of the opportunity.
A conservative U.S. Economic and Housing Market Outlook by Freddie Mac reported that the economy is in a better place than a year ago but don’t expect a speedy recovery.
- · Economic growth will likely strengthen to about 2.1 percent in the first quarter.
- · Expect home sales to grow between 2-5 percent over the 2012 year.
- · The housing market recovery will be delayed as long as there remains a significant gap between buyer and seller sentiment.
“With a new year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence. Housing is starting to raise hope for continued recovery. However the economy is still giving some mixed messages-Frank Notaft, Vice President and Chief Economist Freddie Mac.
STILL HAVE QUESTIONS? PLEASE DO NOT HESITATE TO CONTACT BRAD OR ANN