State of the Housing Industry 2012

By
Industry Observer

Last year, my state of the industry post  followed the state of... addresses by the President and heads of various states.  This year it's my turn to go first, and like last year, the following are opinions that are based only on my personal perception. 

The industry is almost the same as the beginning of 2011. Prices are not changing with any alarming velocity, and the number of sales, although somewhat improved in many markets, are not approaching robust levels.  The new distressed properties are, like many in the beginning of 2011, no longer the result of loans to the unloanable accidental homeowners, but now the result of a poor economy and a job loss or other hardship.  The fact that many persons who can't keep their homes cannot afford to sell them is perpetuating the poor state of the housing industry and a high inventory of distressed property.

As it was in the beginning of 2011, most buyers are first time buyers or investors, and they are getting what appears to be excellent value and excellent interest rates on financing.  Although it appears that there is little possibility of a spike in home prices, interest rates could experience rapid substantial changes. 

Last year, my opinion was that the industry needed to involve move up buyers in the market before anything turns around in a noticeable way.  That opinion has not changed.  With so many underwater owners immobilized for probably another decade, it's hard to see how the present course will change before the 46th or 47th President takes office.  We have a half generation of people who will only move out of their homes if they walk away or negotiate a short sale with their lender. 

Government initiatives are all directed at immobilizing people or turning them into renters.  People who want to stay where they are are being encouraged and assisted in negotiating their exit.  People who want to buy and move to a home that is a better fit for their families are stuck where they are, even if they can afford a much higher payment.  Government and lenders have joined forces in virtually ignoring this large number of forgotten Americans.  They can either stay or walk away and become renters.  2012 -- more of the same.

 

Posted by

 Mike Carlier  Lakeville, MN

 

612-916-3033

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Real Estate Market Trends
Location:
Minnesota Dakota County Eagan
Groups:
Realtors®
Out Of The Box!
"Whacked"!!!
Bananatude
Minnesota Real Estate
Tags:
state of the industry

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainer
69,663
Danny Dietl
www.dannyrealestate.com - Minneapolis, MN
Buy, Sell, Lease - iMetroProperty.com

We still have some time to get things corrected. Locally we are seeing the 'strong' neighborhoods doing fine, maybe prices will increase, while the beaten up ones have a long way to go.

Jan 01, 2012 05:52 AM #1
Rainmaker
1,087,506
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas

Mike,

I hate to agree with you. I wish I could argue that the industry is going to take a huge leap in the positive direction. Much of the optimism is welcomed around the New Year's holiday, but it may not be too realistic to suggest "it's going to be an awesome year." Inventory is high and it's all about "jobs-jobs-jobs" the lackthereof.

Suggested.

 

I'm curious what everyone else has to say about their mkt.

Jan 01, 2012 06:43 AM #2
Rainer
147,792
Michael S. Bolton
Michael S. Bolton,Inc. - Zimmerman, MN
MN Appraiser

Mike~I think the inventory levels are less than last year at this time, which could be a good thing for the spring market.  We do need the 2nd and 3rd time home buyers to be part of the market, hopefully sooner than later.

Have an AWESOME 2012!

 

Jan 01, 2012 06:44 AM #3
Rainmaker
522,422
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Danny, there have been some mcro-areas in the Twin Cities that have fared relatively well during the national housing depression.  The broad Twin Cities market is like most others.  There are just not enough first time buyers and investors to sustain significant progress toward recovery.  The industry needs help in the form of relaxed regulation to allow the porting of debt for qualified move up buyers, and also incentoves to underwater owners to accelerate their principal paydown. 

Jan 01, 2012 06:45 AM #4
Rainmaker
522,422
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Greg, if we could invent a whole bunch more people and give them good jobs, first time buyers could carry the market.  So I guess one way to solve the stagnant industry is through procreation snd importation.   If Europe doesn't whack us too much, I think we'll make some substantial progress toward economic recovery.  It will still be in small steps though.  Better economy will increase demand, and increased demand will add more jobs that are related to building trades.  That will nudge the economy further up, etc.

Michael, I hope you're right, but low inventory may just make the downsized housing industry run better, smaller. 

Jan 01, 2012 06:58 AM #5
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
522,422

Mike Carlier

More opinions than you want to hear about.
Everyone has opinions -- what's yours?
*
*
*
*
Spam prevention