Forecasting 5 Real Estate Trends of 2012

Here are five projected trends for this year's real estate market:

Buyers will return to the market: With an increase in consumer confidence, sales will begin to increase. As the economic conditions and housing recovery continue to improve throughout 2012, consumers will be optimistic and realize that now is a good time to buy.

Increase in foreclosures: Distressed properties will sell at reduced prices, which would in turn affect the values of non-foreclosed homes in that area, and cause more homes to go underwater.

More short sales: Home prices will continue to soften during the beginning of 2012. This reduction in home values will force homeowners into a situation of negative equity. Negative equity is when the value of an asset to obtain a loan is less than the outstanding balance on the loan used to purchase that asset. This is one of the triggers that cause people to tactically default on their mortgage debt. If this does indeed happen, as stated above there could be an increase in the number of foreclosures. However, by easing the requirements of the short-sale process, banks could take pre-emptive measures to help avoid more home foreclosures.

Low interest rates, good time to buy: With all-time-low interest rates and home prices softening, this year is expected to be a good time to buy and invest in real estate. These low interest rates will not be available for long, maybe only for the first half of 2012. With the housing recovery and increase in consumer confidence, it is forecast that interest rates will begin to increase. 

Increase in property investors: Real estate is the most important investment anyone can make. The forecast of all these trends, specifically low interest rates, are a great benefit to real estate investors in 2012.