Real Estate Predictions for 2012 and beyond:

Predictions are slippery things (just ask a weatherman!), but that doesn’t make us demand them any less. The Mayan long calendar has a lot of attention right now because it’s set to run out of days December 21, 2012. We’ve lived past plenty of supposed doomsdays thus far, so instead, let’s consider some real estate predictions for 2012 and beyond:

The Bottom is in Sight
Experts are calling for the stunning 38% decline in home values to bottom out mid-2012 after a final 2% slip. Rather than wishful thinking, these reports agree that the combination of record affordability, undervalued properties, foreclosure clearing efforts, and measurable (if minute) economic stabilization are already showing improvements in sales and inventory ratios, without the artificial bump of housing stimulus.

Spikes and Dips will be Localized
As some areas were hit harder by the bubble burst than others, some areas will show localized improvement sooner, while others continue to fall for longer. This is due to a combination of local economic conditions, speculation, valuation, desirability, and optimism (or lack thereof). Cities like the hardest-hit Detroit will be a long time in stabilizing, while barely-scathed areas like Syracuse and Pittsburg are already showing modest increases. Other areas, such as Fort Meyers have seen a bounce of 12% as investors snapped up undervalued, desirable properties.

Long-Term Recovery will be Slow
Now there’s a shock! Sarcasm aside, while the bubble burst seemed sudden, the bubble was not built in a day and genuine recovery will take time to grow. Low housing prices and low interest rates are helping to lure people back to home ownership, but continuing economic concerns from employment to financing are making this shift a gradual and cautious transition instead of a rush.

The Housing Market and Economy are Linked
The upward turn in home values won’t do much for the economy in 2012, but the following years will see market growth stabilizing at a 3%-4% rate of increase. As holdouts become homeowners and homeowners see their home values finally creep upward, the increased stability will lead consumers back to increased spending. Spending in turn fuels the US economy, which will result in the solid economic recovery we’ve all been waiting for… leading to more buyers and increased home values. Each gain in the housing market or the economy feeds the self-fueling cycle of mutual recovery.

The best predictions are based in current fasts and historical data to give the most accurate educated guess into the future. Considering the massive impact consumer confidence has on economic growth, the recovery on the housing market is a future we want to believe in.

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About David GoldsteinDavid Goldstein is an Owner and Founding Partner of Express Schools, LLC. which operates online education providers Real Estate Express, Insurance License Express and License Tutor. Follow him on Twitter.

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