I am convinced that the real estate market will rebound in 2012!
For years we have been whistling in the dark during the "500 year flood" the market has endured. We've never been through anything like that, and a large number of real estate agents decided to do something else for fun and entertainment. We've been saying the market it turning around for so long that I think it's actually turning around.
I say this because during the period from 2004 to 2006 houses were being built at a rate of 1.9 million per year. During the same period, new households were forming at a rate of only 1.33 million per year, and on top of that anyone could qualify for a mortgage that wasn't in prison.
Since 2007 only 400,000 households have been formed per year, and building has virtually stopped. Even though that's a lower rate of new households, it does consume some inventory.
In 2011 there were over a million new households formed, and there is still no significant construction.
Those people have to live somewhere, and although many people have turned to renting, they still occupy homes. Some regions and markets will do better than others, but nationally I think we're healing.
Do the math just to make sure I make sense, but logic says that we have to be turning the corner soon, and the light at the end of the tunnel is not a headlight!
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