The end of the year is almost upon us, and so once again real estate experts are looking ahead to see what might lie in store for the next twelve months. The housing market actually saw some marked improvements over the last year, and many experts are expecting this momentum to gather pace during 2013.
Nick Timiraos’ recent column in the Wall Street Journal offered up his own expert opinion on what we can expect to see in 2013, identifying the five most important housing issues that will affect consumers and real estate professionals alike:
1. Housing Prices Set To Inch Upwards
The WSJ article warns that much will depend on the success of the economy at large, but should this improve and the unemployment level decrease, many of the housing market’s biggest problems – such as foreclosures, the large number of homeowners underwater, and tough credit standards – will likely ease somewhat, paving the way for home prices to inch upwards even more.
2. Inventories to Grow
In order to meet the level of demand, Timiraos predicts that home builders will take production up another notch, whilst more homeowners may decide that the time is right to sell as housing prices continue their upward trend.
3. Rising Demand as Home Prices Rise
With home prices set to continue rising throughout 2013, the WSJ predicts that buyers will show increased urgency and make more efforts to close on deals sooner.
4. Lending Standards Remain Tight
Unfortunately for first time buyers, it’s unlikely that will see credit becoming any more accessible in the year ahead. The WSJ believes that new credit regulations will likely lock banks into their current “defensive posture” when it comes to lending – if anything, standards could become even more strict.
5. Shadow Inventory to Shrink
But only a little. The WSJ suggests that banks may look to speed up the process of foreclosure in those markets that already have large backlogs, but even so they are likely to remain cautious so that markets do not become inundated again.
We should note that all of this is nothing more than speculation of course, and while most economists are tentatively predicting an improvement in the economy overall, the housing market could quickly take a turn for the worse if these predictions don’t pan out. The WSJ reminds us that housing is still very fragile, and much depends on whether or not lawmakers can agree on a compromise to avert the “fiscal cliff”.