Predictions for Real Estate in 2012
Jack Cotton Real Estate Trends
1. The real estate market will continue to improve.
- Improve means more confidence, more activity and more sales. My definition does not include increasing prices or a return to 2005 pricing.
- Still too much supply. Some markets still have 10 or more homes on the market for every one that sells.
- Many sellers will finally realize that, contrary to their fantasies, prices are not going to make a sudden return to 2005 levels. There will be more seller price capitulation in 2012.
- There will be a significant increase in REO, short and distress sales in 2012, especially in the high end. The ability to “fake it” is running out for many people who have been hanging on.
2. Real estate will be seen as the “other gold”
- Returns in money markets, CD’s and bonds will remain near zero in 2012
- Uncertainty in world economies will heighten
- Many will come to real estate in rare and beautiful places as a safe haven you can use and enjoy.
3. NEXT! Continues to be the favorite word of buyers in 2012
- Emotion has left the real estate market and will remain missing for at least the next year or so.
- Buyers are conditioned to wanting a deal otherwise known as a steal to purchase ANYTHING, esp. real estate.
- Buyers will fall in love with the deal not the house.
4. Second home sales will continue to do better than primary homes in 2012
- Second home sales are demographically driven—Boomers
- Many Boomers have been out of the second home market not because they cannot afford to buy but because it wasn’t cool to buy a second home when economic conditions were dire for so many.
- Boomers will only deny themselves of what they want for so long. We are coming on 18 months of denial which is about the limit for most boomers.
- See Number 2 above
5. 2012 may be the best year to get the best deal.
- It’s a little different this time. In the past, real estate cycles have been about 5 years long. Depending upon who you ask, this downturn started in 2005 to 2007.
- This downturn is more biblical both in terms of scope and duration. 7 years is probably what we are looking at so 2012 may be the best year to get the best deal as the homes with best prices in best condition will go first.
