It’s that time of year where we look back at the past and hypothesize about the future.
Here are some predictions that were made for 2011
1. Prices and mortgage rates will stay low in most areas, but will rise in affluent areas and markets experiencing job/population growth.
2. Loan guidelines will tighten up, and down payments and loan costs may rise.
3. Condos will become even more difficult to buy.
4. Mortgage rates are going to remain low. However, it’s tough to tell when they’ll start to climb and how quickly they may climb. For that reason, it may be smart to try to secure a mortgage near the beginning of 2011 rather than waiting until the end of the year.
5. Home prices are going to decline in 2011. This seems fairly clear. However, it is much less clear how much they will decline or when they will stop declining and bottom out. Although some sources predict drops as high as 20%, it is much more likely that the drop will be small. Housing bottoms may even have been reached in some urban areas.
6. Because mortgage rates will remain low and home prices are at or near their bottom, 2011 is a good time to invest in real estate if you have the means to do so.
Here are some predictions that are being made for 2012
1. 2011 saw record low interest rates and high affordability, but sales will likely remain weak.
2. Price drops seen through 2011 will continue.
3. Rentals rebounded in 2011 and will drive development in 2012.
4. Market disparity between, and within, regions will continue.
5. Foreclosure rates rising again, expected to jump in 2012
6. Signs of life seen in housing construction but no true recovery yet