PrintThe weatherman is not the only source of spring-like forecasts this week. Two national surveys released today found that consumers are feeling better about the real estate picture for the first time in months.
Fannie Mae’s February National Housing Survey found that Americans expect home prices to increase by 0.8 percent over the next 12 months, which is down slightly from last month, but 28 percent of respondents expect home prices to increase over the next 12 months, while 15 percent say they expect home prices to decline (down 1 percentage point since last month). Fifty-three percent say prices will stay the same.
The percentage of respondents who say it is a good time to sell rose by 3 percentage points to 13 percent, the highest level in over a year, while the percentage of respondents who say it is a good time to buy dropped 1 percentage point to 70 percent this month. Sixty-five percent of respondents say they would buy their next home if they were going to move, up 1 percentage point since last month, while 29 percent say they would rent, down 1 percentage point versus last month.
On average, respondents expect home rental prices to increase by 3.5 percent over the next 12 months, a slight increase since January.
Forty-five percent of respondents think that home rental prices will go up, a 2 percentage point increase from last month, while 3 percent expect them to go down, a 2 percentage point decrease from last month and the lowest value in over a year.
Americans’ concerns about key economic and housing issues are beginning to subside, according to results from. Consumers’ attitudes have stabilized across most indicators – including personal finances, housing, and employment – demonstrating their sense that downside risks have abated somewhat compared to late summer and fall of 2011. While Americans’ confidence in the direction of the economy has been the most pronounced (35 percent think that the economy is on the right track, up 19 percentage points since November, and 57 percent think the economy is on the wrong track, down 18 percentage points since November), their confidence about personal financial situations, household income, and household expenses, as well as attitudes about homeownership and renting is holding at steady levels. At the same time, Americans’ concern about losing their job in the next 12 months has stabilized since the late fall, with 76 percent of Americans saying they are not concerned in February 2012, compared to 70 percent in November 2011.
“The pickup in the pace of hiring over the past few months has helped soothe consumer concerns, lifting their moods regarding their personal finances, the direction of the economy, and their views on the housing market,” said Doug Duncan, vice president and chief economist of Fannie Mae. “As a result, we’ve seen more potential for economic upside, creating a more balanced near-term outlook.”
An even brighter picture was painted by the fourth annual Cotton Report from Cotton & Company, a Stuart, FL real estate marketing company.
The Cotton Report found that 46 percent of respondents and 53 percent of those with household incomes over $100,000 believe we have reached the bottom of the market. Fifty-four percent of prospective buyers are considering primary residences as opposed to vacation homes or investment properties, an increase from 38 percent a year ago.
“For those who have been waiting to make their move, trying to time the bottom of the market, they may have already missed it,” said Stephann Cotton, President and Founder of Cotton & Company. “2011 saw rapid absorption of distressed inventory in major markets like Miami and San Diego. The Cotton Report’s market data supports this growing perception, with a steady reduction in the number of investors actively in the market and fewer buyers expecting for further price reductions.”
April 15th, 2012 at 7:49 am
In Northeast PA here, right on the edge of the Poconos. In places like Monroe tcnuoy, I expect prices to fall even further…2500 sq foot homes on less than an acre were going for 350K a year and a half ago, and now can be found for less than 200K, especially in pockets of developments that have a criminal element. Forclosures are rampant there as well.In Pike tcnuoy, prices on existing homes are still up over 40% since 2004 and are selling, though slowly. I’d say average DOM for something priced reasonably is 100+, with some listings sitting for 600+ if the price is out of control and firesales moving the same day. The proximity to NYC is helping, as people are selling there and on LI and SI and moving here. Or, they WERE…when their homes were actually selling for more than they owed. I’ve heard from many new arrivals that they have moved into their vacation places here and are letting their homes in LI sit empty until they either sell or are foreclosed on. Pike could see a further drop of 10-20% easily, especially with the dissapearance of easy funding. In Wayne tcnuoy, where I am, things are still rather rural and things really never hit a huge peak, but are up overall around 40%. A mix here…million dollar lake homes and 100K in town places…I think a fall of 20% would be reasonable to expect, and the inventory is actually lower than I’ve seen in a year. The resets will tell, though.Our home sold in October for 145 K, and we bought it for $85K in 2005. The buyers had zero down, and a piggyback loan. And I doubt they could get what they paid at this point without putting another 30K into the place. Things were so cheap here pre-2000 that I’m not sure they’ll ever be the same…the home that we just sold would have been around 40K at that point. Hence my bubble sitting…happily renting to wait it out.