"The real estate market will improve in 2012...gradually." So says Lawrence Yun, Chief Economist of the National Association of REALTORS®, at a recent conference.
According to Yun, tight mortgage credit conditions and consumer confidence have been holding us back. Nevertheless, he said, there is a pent-up demand for housing that can’t go unsatisfied forever. The gradual increase in real estate sales will track the gradual increase in GDP (Gross Domestic Product), which is expected to come in at 1.8% this year and grow to 2.2% next year.
Interest rates are expected to rise slightly, according to Yun. From their present all time lows of 4%, they will likely reach 4.5% by mid-2012.
Ok, real estate is slowly starting to turn the corner. We won’t be having a blow out party, but we’re making the turn. We see stabilizing evidence in the Berkeley/Oakland market, which is indicative of a market bottom. For instance, since June of this year, the average sold price in Berkeley was $680,853 (or $407 per square foot). That compares to last year’s $679,531 (or $430 per square foot). The difference in price per square foot is more likely a difference in size of houses being sold. In Oakland, the average price since June of this year was $343,606, with a 28% increase in number of sales. The average price per square foot was $212. That’s higher than last year’s $363,054 average price and $196 per square foot.
The moral of the story given is that house prices likely won’t be declining, but interest rates...and the cost of buying a house...will be going up. If you are thinking about buying a home or trading up and you can get a mortgage – this is the closest thing you’ll get to a “buy” signal.
If you’d like to explore your possibilities for buying a home in Berkeley/Oakland, just call me on my cell phone: 510-847-2409.
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