Housing Market to Perk Up in 2012

There appears to be signs of life out there for the housing market.

The up-and-down ride for real estate the past few years was seen again in the fourth quarter of 2011, according to a survey of HouseHunt real estate agents across the country. There are pockets of good news offset by bad, with home values and prices basically bumping along the bottom of the grid on a perceived never-ending rocky road.

But most of the surveyed agents are optimistic moving forward, and the majority say that buyers are out there and activity is up, but pricing remains stagnant, and in some cases inched downward a little more throughout the year.

"I've been just as productive now as I was in the heyday of real estate except that the prices are 50 percent less," said Chris Cochran, a broker-owner from Riverside, Calif. "It's good news for buyers and bad news for sellers because sellers are losing equity by the minute and buyers are able to get a fairly-priced home and a really, really low interest rate."

Cochran said that the inventory in his region of Southern California is crowded with short sales, which fuels a buyer's market mentality. He added that prices were flat during 2010 and the first three quarters of 2011 before edging down late in the year. A breakdown of listings, he said, were 65 percent short sales, 10 percent REOs and the rest investor-owned "flips."

Looking forward, he thinks the housing inventory will increase and prices will again drop slightly before stabilizing in the middle of 2012 with a slight uptick in the final few months.

"The banks that have this so-called ‘shadow inventory' just need to put it on the market and get rid of it," Cochran said when asked how he would get real estate rolling again. "Once we get rid of all that inventory, supply and demand will take over and prices will go back up."

Decreased prices haven't been a big problem recently in the Naples area of Florida, said agent Dawn Amato, whose territory is Marco Island. She said that homes that were previously reduced by around $50,000 are now reduced "by a couple thousand, if that."

"We're not getting near as many reductions as we did in the past," Amato said. "It's been turning around steadily over the past year. The office I just left sold over $200 million in 2011. That's just one office. People feel the bottom of the market is here, so they're buying, and eager to do so."

Amato, who said she's "openly optimistic" about 2012 and beyond, said a tight inventory of available houses is the main problem in her area. That scenario leads to faster sales and even prompted some 'price wars' the final two months of 2011.

"If it's on the water with a view and it's priced right, it could be sold in days," Amato said. "Same scenario, but priced too high, maybe a few weeks."

Overall, 22 percent of HouseHunt agents said the average time for houses on the market was 60 days or less, down from 26 percent in the previous quarter. Regarding inventory, figures were identical in the third and fourth quarters, with 68 percent saying supply was good and 32 percent reporting a tight market. The only significant difference from the third quarter to the fourth was 42 percent saying they were getting at least 95 percent of a listing's asking price, compared to 51 percent previously.

On the Boise outskirts of Meridian, Idaho, agent Jeff Stewart said inventory and foreclosures have been declining for a number of quarters, with short sales diminishing toward the end of 2011. Prices are basically stable, he said, and the average time houses are staying on the market has decreased "from eight to nine months of inventory" to a little less than three months.

"The market is actually better of late," Stewart said. "We actually have a shortage of good properties. I think people are confident that we’ve hit bottom. In fact, in some of the areas I cover, prices are ticking up a bit, and I think it bodes well for a slow curve of stabilization."

An upward trend also was reported by agent Kevin Bergin, who works in the Long Beach Island, N.J., shore area. Bergin said levels in his office for the year were back to 2008 levels, with 60 percent of house visits turning into sales.

"I think buyers generally feel better about the economy, the low interest rates and prices being down 15-20 percent," he said. "People are still very discouraged about the government on both sides of the aisle, but they feel that now is a good time to buy a second home."

Of Bergin’s clients, 10 percent were first-time buyers and 25 percent were buying a primary residence. The assessed value vs. the asking price remains an issue, he said, but "most of the people looking now aren’t the same tire-kickers as there were two years ago when they were just asking for ridiculous prices."

Overall, prices in his area are down 7 percent from 2010, Bergin said, but he’s optimistic about 2012.

"If the current trends and the way people are thinking continue and interest rates stay low, which they probably will, it’s going to be a pretty good year," Bergin said.

Optimism also is what Wanda Hardee is clinging to as the new year begins. The agent who works in the Anderson, S.C., area said she had two "big closings" in December to ring out 2011 on a high note. But while she said that "things are picking up here," Hardee added that it’s hard to get sellers to price their homes correctly because of increased competition from foreclosed properties.

"Foreclosures are still pretty prevalent here and we’re starting to see more and more in the higher-priced end," Hardee said, adding that another obstacle to home sales has been the difficulty of some people being able to secure financing.

Still, she said she loves the business and only knows one way to tackle it.

"We’re going gung ho," Hardee said. "With real estate, just like anything else, you have to have a positive attitude. We’re going to make it work."

Additional results from HouseHunt’s fourth quarter survey include:
• Sixty-five percent reported that they were getting multiple offers, the same figure as the previous quarter.
• Twenty-nine percent said customers were first-time buyers, up slightly from 27 percent in the previous quarter.
• Fifty-one percent reported a negative price appreciation, compared to 58 percent in the third quarter and 64 percent in the second.

For more information, visit www.househunt.com.