2012 PREDICTIONS FOR THE FLAGSTAFF REAL ESTATE MARKET

1. 2012 will be the start of the housing recovery: Flagstaff real estate numbers for the last quarter or so have shown positive results with non-distressed homes selling far better than distressed homes. Buyers are out there looking for good homes to buy. I have been seeing buyers in record numbers for this time of year.
2. Banks will start lending again: And not just to people with good credit. After 5 years of foreclosures and short sales, banks will strategize that there are millions of Americans with jobs, good income and, except for that that upside down mortgage, an otherwise good credit history. There will be reform in the banking industry that will affect who and how banks lend that will include those that experienced a foreclosure or a short sale.
3. Flagstaff homes will see positive price increases in 2012: Many of our neighborhoods are already experiencing modest increases in pricing. There will still be some price declines where lower end homes in poor condition are on the market via REO agents.
4. Land will heat up: Land sales have been dead for years as the cost to buy land and build is too high compared to the choices offered in the resale market. As the economy improves buyers desiring a new home will be forced to buy land and build. Land prices won’t go up much but land/lot inventory will start to turn.
5. The overall economy will improve: Much of the woes in the housing market have to do with consumer confidence. The increase in activity we are experiencing is being buoyed along by stronger than usual consumer confidence in the overall marketplace. Gas and oil prices are stable. Unemployment figures are improving. The stock market is becoming more predictable and overseas markets seem to have stabilized as well. These are all factors that make people feel better about the overall economy and will cause them to spend again. Need more evidence? Holiday Sales for 2011 were up 16% over last year. Americans are tired of feeling poor.
6. Baby Boomers will buy real estate again: Pre-boom, (pardon the pun) the Baby Boomers were going to retire earlier, richer and look to buy lots and lots of real estate. The housing crash and poor economy delayed the onslaught, but they are still out there. Maybe not as rich, maybe not as young, but still there.
7. Interest rates will remain exceptionally low: It’s an election year. Interest rates of every variety will be stable throughout 2012. But, they have do have to go up eventually. Buyers need to take advantage of these historically low rates soon.