26 January 2012
The end of 2011 brought good news on the nation’s economic front, with unemployment in December falling to its lowest level in three years and the economy adding 200,000 jobs during the same month.
Dave Liniger, chairman and co-founder of RE/MAX, said that the country’s improving economic fortunes bode well for the residential real estate market in 2012. Based on the recovering economy, the leader of RE/MAX recently predicted a continued rebound in the nation’s housing market this year.
“Interest rates will remain at or near historic lows, and home prices will stabilize and start to rise by the end of the year,” said Liniger. “There is no question, the housing recovery will be slow and steady, but for many cities the turn-around is already happening.”
The numbers in Illinois seem to bear this out. As the year ended, housing sales in the state began to rise. According to the latest numbers from the Illinois Association of REALTORS® (IAR), 8,828 homes sold statewide in December of last year. That’s up 14 percent from the same month one year earlier.
In the City of Chicago, December 2011 home sales hit 1,536, according to IAR.
That is up 6.4 percent from December of 2010.
Moody’s Analytics brought even more good news for the coming year. The economic analysis company predicted that existing home sales across the nation will rise 12 percent in 2012 after rising 2 percent last year. The company also predicted that the number of new home sales will rise 74 percent in 2012.
At the same time, historically low interest rates on 30-year and 15-year fixed-rate mortgages make borrowing money to finance a house or condominium a more affordable prospect.
“Informed and savvy consumers and investors recognize there is great opportunity in this market, and they are leading the way to recovery,” Liniger said.
Liniger, during his 2012 forecast, offered several predictions regarding the 2012 housing market, including:
1. Continued low interest rates;
2. Home prices stabilizing and starting to rise;
3. Increasing numbers of home sales;
4. Rising inventories, mostly due to increased foreclosures;
5. Distressed properties will make up about half of all sales;
6. An improved short-sale process to help avoid foreclosure;
7. Homeownership rates will continue to fall;
8. Foreign and domestic investors will buy 25 percent of homes;
9. Increasing reliance on real estate agents;
10. Increased use of mobile and social technologies.