By Mike Colpitts
Home sales are already picking up in many areas of the U.S. and are forecast to increase even more in 2012 as pent-up buyer demand plays a critical roll in the housing market recovery.
Improving market conditions in the Mid-West and Upper Northern regions of the country are expected to spread into other areas by Housing Predictor analysts. However, the housing recovery is projected to take a number of years to develop as increasing government guidelines are adopted by banks and other mortgage lenders in coming years.
New Regs Slow Market
Most regulations dictated by the passage of Dodd-Frank financial reform legislation have not yet been issued by federal regulators, who are still in the process of forming the guidelines. The delay has slowed the transition of the market and is likely to take years to be fully implemented.
However, after more than five years of declining home values in many of the hardest hit regions of the country, prices are getting to be attractive for many perspective buyers. Home values reached 1971 levels in December, according to the Housing and Urban Development Department.
The foreclosure crisis has pushed home prices lower in the majority of the nation at unprecedented modern day rates, producing a bargain buyers’ market in many regions, including most of the hardest hit states like Florida, Nevada, Arizona, Ohio, Georgia and Alabama.
But will prices rise soon?
However, there’s little evidence to support higher prices in the near future paid for homes in most areas of the country. Cities in 15 states, mainly in the North and Mid-West are forecast to inflate in value in 2012, but the majority of the country is still reeling from the fallout of the hardest housing downturn in a generation.
Home values aren’t expected to improve in most areas through at least in 2012, and are likely to take many years to improve in some of the hardest hit U.S. cities. Fort Myers Beach, Florida for instance is likely to see better home prices during the year, but that’s only because homes have lost more than 80% of their value from the markets peak highs.
Nonetheless, increasing home sales are usually the precursor of higher home prices, and that should develop over time if the U.S. housing market is anything like it has been in the past fifty years.