2012 Real Estate Predictions

2012 predictions

There is no doubt about it in the last several weeks my telephone has been ringing. If the nature of those telephone calls is any indication, then real estate should start a rather robust turnaround in the first quarter of 2012. In a word, my sales pipeline is looking rather full. That said home sellers should not expect to see any sort of rebound in the value of their homes.

I justify this point of view by looking at several recent sales that I’ve had. In my own neighborhood in which I work very routinely values are down dramatically. I am seeing and offer acceptance differential in sales of anywhere between 5% and 35%.

In contemplating the value of my own home which I purchased for $149,000; now most likely would sell in the neighborhood of $125,000. I’m not moving! Conversely, Ridgefield a neighborhood in which I have several rental homes, sold new in 2003, 2004, and 2005 at roughly $200,000-$229,000 for a 2700 ft.² home with four bedrooms and a two-car garage. Today in multiple listing there were two homes that were both listed one at $126,000 and the other $139,000. Both of these homes are in the Ridgefield neighborhood. That is a tremendous decline in value and many people in that neighborhood simply will not be able to sell.

Overall foreclosed homes, distressed homes and short sale homes are still driving values down in the Raleigh-Durham real estate market. What many folks fail to understand is that a foreclosed home is a comparable property and bank appraisers do use foreclosed homes when establishing value. With an eye to that in 2012, 2013 and most likely well beyond REALTORS and homeowners are going to have to price homes very close to an expected sales price based on most recent comparable sales.

The picture is looking better in real estate but it isn’t rosy and rosy as a long time away.