The National Association of Realtors is fond of saying that every housing market is different. Thankfully so — going into 2012 as many languish, at least a few are poised to thrive, from the Sun Belt and Capital Beltway to the busy Beehive State out West.
Despite Thursday’s encouraging sign that U.S. pending home sales rose 7.3% in November to their highest since April of last year, the nation’s housing malaise runs deep. Nearly 29% of homeowners with mortgages owe more than the house is worth, says real estate site Zillow (Z). One home in every 579 totters in a phase of foreclosure, RealtyTrac says. In Nevada and California — frothy states in the price bubble — it’s one in every 175 and 211.
Even record-low interest rates — like a 30-year fixed south of 4% for weeks — haven’t stoked purchases. The count of homes for sale has slid for six months to the lowest since 2006, NAR says.
And yet, pockets of optimism are appearing in the beleaguered real estate industry. Some homeowners expect to build equity in the coming year. And there are buyers not completely paralyzed by fear of another price plunge flushing away their down payments.
Points South Look Up
Florida, a poster child for the bust, is again drawing buyers to some former hot spots. They often come from abroad and pay cash.
“We were like dead in the water the last few years,” said Ralph De Martino, president of Ocean International Realty, in Miami Beach. “But 2011 has been one of my best years ever.”
With many factors at play, it’s tough to peg with certainty how specific areas of the U.S. will fare in the next year. But there’s some consensus on what moves prices higher: influx of new residents, strong job growth, good schools and infrastructure; vs. what drags on values: high foreclosure rates, high unemployment and shrinking populations.
NAR doesn’t expect gangbuster sales in 2012, likely just a 5% bump and 2% to 3% price appreciation.
“Really we’re talking stabilization, with some areas with some modest growth,” said Jed Smith, NAR’s managing director for quantitative research. He says places to watch are ones with job growth, including Miami, parts of Texas, Utah and North Dakota.
Among the areas where experts expect to see good gains in 2012 are:
• South Florida. The Sunshine State’s recovery looks strong going into 2012, housing analysts say, with existing-home sales on the rise — up 11% in November from a year ago — and progress reducing still-high foreclosure inventory.