Housing to gradually improve in 2012, NAR economist says

Gradual improvement in the housing market is expected next year, with existing-home sales edging up 4% to 5% and new home sales getting an even bigger boost off this year's record lows, the chief economist of the nation's largest real estate group said Friday.

"Tight mortgage credit conditions have been holding back homebuyers all year, and consumer confidence has been shaky recently," Lawrence Yun, chief economist of the National Association of Realtors, said. "Nonetheless, there is a sizeable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can’t continue indefinitely."

Yun, who made his comments during the annual NAR conference for real estate agents under way in Anaheim, Calif., projected gross domestic product growth of 1.8% for 2011, rising to 2.2% in 2012 with the unemployment rate declining to 8.7% by the second half of 2012.

Mortgage interest rates, he predicted, would gradually rise from record 2011 lows to 4.5% by the middle of 2012.

"Very favorable affordability conditions will dominate next year as well, which will probably be the second best year on record dating back to 1970. Our hope is that credit restrictions will ease and allow more homebuyers to take advantage of current opportunities."

Existing-home sales are forecast to edge up about 1% this year. Based on NAR’s current projection model, existing-home sales would total 4.96 million in 2011. NAR is revising downward existing-home sales totals in recent years although it expects little change to previously reported comparisons based on percentage change.

New-home sales for 2011 are projected at 302,000 this year, a record low, with expectations that they will rise about 23% to 372,000 in 2012.

Housing starts are forecast to rise about 8% to 630,000 from 583,000 in 2011.

With falling inventory, the median home price should rise in 2012, he said.  "Home prices have yet to show a definitive stabilization pattern in most areas. Still, given an over-correction in prices, there likely will be moderate appreciation in 2012," Yun said.

Richard Peach, senior vice president at the Federal Reserve Board of New York, said the economy continues to disappoint. "Among the significant structural impediments are the legacy of the housing boom and bust, and fiscal contrition at the state and local level."

He promoted moving foreclosures by giving incentives to military servicemembers.

"My idea is to allocate certificates to 2.5 million service members who served in Afghanistan and Iraq that could be used as a down payment on a foreclosed home in the Fannie or Freddie portfolio," he said.  This would help to absorb the inventory and stabilize the housing market.

Write to Kerry Curry.

Follow her on Twitter @communicatorKLC.

About Ady Simion (Realtor and Public Notary)

Ady Simion was named in the Top 1% of all agents for NRT LLC a subsidiary of Realogy that operates a variety of real estate offices under brands such as Coldwell Banker, Sotheby's International Realty, Century 21, The Corcoran Group, and the technology-based brokerages ZipRealty and Climb Real Estate. NRT has 787 offices and 47,000 sales associates. Selling and buying property can be very stressful but with the right agent it can be profitable and a fun experience. Ady is also a Notary Public and being a people person he wants to help negotiate for his clients making their transactions as smooth as possible. Ady’s goals are simple: He wants to be the best source of information on the Los Angeles area Real Estate market, as he assists clients through each transaction with care and professionalism. He is proud of his large referral base of clients who have placed their trust in him over the years. Why him, when there are so many good people out there?!?! • Sellers will have their property exposed to the largest team of sales professionals in the world by far. Coldwell Banker Agents sale more homes than anyone else. • Buyers will have the opportunity to view more properties exclusively. • And most importantly when you hire him you get a whole team working for you not just “only one person”. Ady Simion started his Professional Career as an Insurance Agent, and then mastered the Mortgage Industry focusing on helping buyers and sellers achieve their life dreams. He now is an Agent with the Largest Residential Real Estate Company in the nation and the world, Coldwell Banker, at the Pasadena office which is the leader in the areas in which he specializes. After finishing College Ady has consistently been a Top Producer in every office/business he worked at. He speaks English, Romanian and Spanish. Real Estate is constantly changing and working with an agent that has been involved in the Real Estate buying/selling process most of his life is always beneficial for clients. Call, text or e-mail him or just stop by to say Hi and ask any real estate questions you may have.

Posted on November 23, 2011, in Uncategorized. Bookmark the permalink. Leave a comment.

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