Are you wondering how the housing market will fair for 2012? Well, according to Fannie Mae’s National Housing Survey, consumers are taking a “wait and see” approach to the housing market. Twenty-two percent say prices will drop, while twenty-three percent say prices will increase. About fifty-three percent say the prices will remain the same. One area the respondents agree upon are rents. Most say rents will rise significantly.
Nationally, rents rose 2.3 percent over the prior year for single family units and 3.5 percent for multifamily. On a local level, the amount of investors entering the market has increased significantly over the prior years. Half of our buyers are investors looking for single family or multifamily homes. Housing prices have decreased to the point where as an investor it pencils out to purchase a rental unit because of the low-interest rates and lower prices. Also, Clark County is at a 98% occupancy rate, which decreases the risk of a vacant unit.
Here are the highlights of the survey:
• Twenty-two percent of respondents expect home prices to increase over the next year (up 3 percentage points since last month), while 22 percent say they expect home prices to decline, down 1 percentage point since last month. 53 percent say prices will stay the same, a 2 percentage point drop from October.
• Thirty-three percent of Americans say that mortgage rates will go up over the next 12 months, down 3 percentage points from October and a return to the level seen in September.
• Sixty-eight percent of respondents say it is a good time to buy a home (down by 1 percentage point since last month), and just 10 percent say it is a good time to sell, which is unchanged from the previous two months.
• On average, Americans expect home rental prices to increase by 3.2 percent over the next year, a 0.1 percent decrease from October.
• Just 6 percent expect a decline in home rental prices (unchanged since last month), while 41 percent of respondents believe that home rental prices will increase in the next 12 months.
• Thirty-two percent of Americans say they would rent their next home, while 63 percent say they would buy, down 3 percentage points since last month and a return to the level seen.
Locally, we still struggle with the economy and unemployment. Until that improves, the market will not flourish. I am seeing less inventory in the $100,000-$150,000 price range, because of investors entering the market, so if you are looking to purchase in this range, you might want to move now. I see this as a start to price increases in this range, however, only time will tell!
Let me know your thoughts regarding the market and if you have any questions. Our passion is to educate the consumer on our local market, so they can make the best choice for their family.