Monday, November 28 2011
Market Watch
Last December in Market Watch, I made several specific predictions about what I thought our housing market would do in 2011. My projections from last December have proven to be accurate. As I said then, the fact that we had two tax credit programs made specific monthly forecasting easier. The one area I missed a little was interest rates. I said last year that rates would rise. I still believe that rates will increase but it appears that it will take a little longer than I thought. Partially because the Federal Reserve has kept short term rates low, fixed rate mortgage loans have remained at historically low levels.
The National Association of Realtors (NAR) has forecast a 4-5% increase in homes sold nationally in 2012 compared to 2011. Although Indiana’s business environment is one of the best in the country and the unemployment rate in our area is below the national average I think that projection is a little optimistic. One reason is that we will have a hotly contested Presidential election next year. My experience is that big national elections tend to slow real estate purchases in the short run. After an election, everyone knows the winner. Those that voted for the winner are happy and positive, and those that voted the other way at least know who won and a clear path, even if not their preferred path, is better for housing than not knowing what to expect.
I expect sales locally in 2012 to increase slightly over 2011. I don’t see significant month over month changes like we had this year because there was no tax credit in 2011. Eventually interest rates and home prices will rise. Locally, inventory is still low based on historical norms. Based on low inventory, don’t be afraid to put your house on the market. There is less competition than normal. If you are thinking about buying, Lawrence Yun, the highly respected economist for NAR believes there is more upside appreciation potential than there is downside risk and I agree.
For those of you who are interested to get more information on real estate in Evansville, we invite you to log on to TheTrentiniBlog at www.EvansvilleRealEstate.info We update this blog on a regular basis and we are proud to say that our reader ship is increasing every month.
Please feel free to contact me at 812-499-9234 or at Rolando@TheTrentiniTeam.com if you have any questions.
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