So, once again we have the million dollar question: What will the local housing market do in 2012? As usual there are pressures on the market in both directions. Let's take a look at several factors.

Market Conditions: The National Association of Realtors revised their 2007-2010 market analysis down according the the December 22 LA Times. This means that the market was really worse than anyone was saying. This seems to indicate that we have only one way to go, and that is up. In addition, USA Today reports that the housing bust is nearly over. So, overall market conditions for 2012 look positive.

Interest Rates: The printing of money for stimulus increased the M1 Money supply which gives inflationary pressure to the market. So far, this has not happened. In fact, interest rates actually went the opposite direction. Short term the Fed seems content to leave them there until economic growth starts heating up. This is at least a positive for the first half of the year.

Foreclosures/Defaults: The adjustable rate mortgages given in the past are going to still reset through 2013. This means that there should still be a number of properties put on the market for the next 18 month or so. This could still dilute the market. So, this would be a negative for home prices.

Economic Perception: When people have confidence in the economy, it improves. When they have a negative outlook, things get worse. Most news services are highlighting positive aspect of economic improvement including improved housing starts, less people seeking unemployment, pending home sales are up and inventories (at least locally) are low. This is a positive for the market.

There are a few other factors but at least this should suffice to say there seems to be more pressure for the housing market to improve in 2012 over what it was in 2011. That will be good news for sellers and with interest rates still at an historic low, it isn't necessarily bad news for buyers.

If you are thinking of buying or selling in 2012, please give me a call or send me a text or email. I would be glad to help.

Tommy Lee
DRE #01723594
tommy.lee@dilbeck.com
323-821-2292
говорю порусскии