Sales of Distressed Properties to Rise, Prices Expected to Improve Mid-Year
Sales of homes, particularly distressed properties, are predicted to rise during the year. The cheap prices of residences are expected to attract more buyers and investors as they try to take advantage of the low prices before they start rising again by the middle of 2012.
And this is what a lot of housing analysts are predicting for the year – a mid-year rise in housing prices. They are expected to decline by more than 3.5% during the first two quarters, but by the second half of the year, prices are projected to rise by nearly 2.5%.
Sales Buoyed by Urgency
The expected rise in housing sales is based on the belief that buyers would want to take advantage of the cheap prices of distressed homes and the low mortgage rates. In addition, buyers are likely to expect some improvement in the housing market as the economy stabilizes and they would likely race to grab the last bargain properties before prices start to rise again.
Moreover, the supply of distressed homes for sale is starting to decline, albeit very slowly. As consumer confidence improves and the unemployment rate declines, more investors and homebuyers will not be able to resist the lure of home affordability, particularly when rental rates are starting to rise.
What it Means for Housing in General
Analysts believe that the projected surge in sales will greatly contribute to stabilizing residential prices. Although a full recovery is still highly unlikely in 2012, majority of economists expect incremental improvement in housing during the year. The consensus is that, at least, housing will not get any worse but may even make strides during the period.
Housing, the job market, the European crisis and consumer confidence will all play important roles in sustaining the small improvement in the nation's economy. With distressed properties remaining a major problem, the best that can be hoped for is for a minor improvement by the middle of the year.
Related Posts:
- More Positive Predictions for Housing Even with Huge Supplies of Distressed Properties
- Distressed Properties Remain an Attractive Option for Most Buyers
- Slow Drop in Home Prices Despite Rise in Repossessed Homes
- Home builders Optimistic Even Without Federal Tax Credits
- Housing Market Slowly Gaining Ground Despite the Presence of Distressed Properties
