WHAT will happen in 2012 ? Home values fell 0.8% nationwide from May to June, the smallest monthly decline since the start of the housing bust in June 2006.That should be good right? The percentage of people who owe more than their homes are worth declined from 28.4% to 26.8% of those with mortgages.
Don’t get too excited, warns Stan Humphries, Zillow’s chief economist. He’s still predicting that home values won’t hit bottom before 2012, and maybe later. That is one ECONOMIST!
“While there are many positive signs in the second quarter, and it is clear the post-tax credit free-fall of home values is over, we’re not out of the woods yet,” Humphries said in a news release. “We expect a bumpy road ahead. There will be many ups and downs in home values before this is over, and we continue to expect a true bottom in 2012, at the earliest.”
“In June, the survey picked up the first indication of a turning point in the latter part of 2012 or early part of 2013. The current survey, taken in November and December 2010, bolsters those results and gives us more confidence that we are looking at the image of a turning point,” said Jerry Nickelsburg, senior economist, UCLA Anderson Forecast. That is another ECONOMIST predicting similar scenario.
The forecast for industrial space shows most of the optimism focused on the Bay Area and expected growth in technology sectors.
“A recovery in commercial real estate always lags a recovery in the rest of the economy. What we are observing is typical in this part of the business cycle,” said Nickelsburg. “After 18 months of pessimism about office and industrial markets we have now seen six months of optimism.”
Here are the Market Analyst best recovery bets for housing:
1 Tacoma Washington
2 Palm Bay, FLA Median home price: $141,000 Drop since market peak: 49.9% Forecast gain by 9/2012: 9.4%
3 Memphis
4 Rochester
5 Pittsburgh
6 Seattle
7 Tucson AZ Median home price: $165,000 Drop since market peak: 37.3% Forecast gain by 9/2012: 3.4%
8 Colorado Springs
9 Charlotte NC 10. New Haven Conn,
I would hope we could image either Tucson or Tampa Bay Fl, now based on the CNN report Tucson has stability compared to Phoenix and most foreclosures homes are in very buyable condition. For Tampa Bay that decreased by 50% which is very similar to outskirts of our major counties. What might drive that area to come back sooner than the rest of us is because of the retirees, with prices dropping to a medium average home pricing of around $ 141K it is now within the price ranges of baby boomers wanting to reitre in Tampa Bay FL. Lets hope that all happen and base on history it should trickle down to our economy here in Cali.
Here I believe is the biggest problem, Shadow inventory, see what the experts are saying :
One big issue that will determine the duration of the housing crisis is how much “shadow inventory” still remains to hit the market – homes that have been foreclosed on or will be foreclosed on but are not yet for sale. Standard & Poor’s estimates that the shadow inventory is enough to last four years, or about eight times what you’d see in a healthy market. But as Christine Ricciardi of Housing Wire notes, the shadow inventory varies drastically by location. Or, don’t forget that all real estate is local.
Who should come to our rescue? House flipping makes a comeback Flippers are braving the market and might be rewarded for it.
A green light for investors
San Diego investor Curtis Gabhart is ecstatic about the new rule and says it will definitely boost his investment in Southern California homes.
“We were (flipping) one or two properties a month until January,” he says. “With the new rule, we’ll probably do three to five a month. It increases our yield and decreases our risk.”
James Ward, an Ocala, Fla.-based short-sale negotiator with Crosswind Properties, says he has been getting 20 to 40 calls a week since HUD’s announcement from investors interested in buying and flipping more properties.
“If it works the way everyone is hoping it will, it will be huge,” Ward says.
Flipping making a comeback
However even without the waiver, flipping is making a comeback, as investors use cash to buy short sales and bank-owned properties.
In Southern California, 3.5% of the homes sold in January had previously changed hands between three weeks and six months prior, according to MDA Dataquick. A year ago, no part of the area had a flipping rate over 2.1%.
Boom-and-bust areas such as Miami and Phoenix also saw significant upticks in December – the last month for which data on these areas were available from Dataquick – as did Clark County, Nev., where Las Vegas is located. Here, flips jumped to 4.2% of all sales in December, up from just 1.7% the year before.
In a nutshell, we will see an mirror image of what happen this year probably next until early 2013. Banks will start to encourage investors buying, lending guidelines for investment loans will most likely come easier a bit compared to owner loans. As far as jobs are concerned I still feel strongly that the Construction Jobs needs to come back to us especially So Cal for our California Economy to start to grow.
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Thanks for your inquiries and messages. Have a healthy and prosperous years to come. Please send your inquiries to Ken Go of 1st Innovative Finance Group at 562-697-7028 or write to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
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