Mark Fleming, chief economist at Core Logic, reports that “the time is right in 2012 for prices to begin growing again.” In an article published in CoreLogic’s MarketPulse newsletter, Fleming points out that the U.S. economy has shown an “encouraging level of stability” and was able to stave off stagnation last year despite a number of negative forces, including fiscal policy indecision here in the U.S. and the economic crisis over in Europe. Fleming believes that the U.S. economy will continue to show stability while moving towards positive growth in 2012.
In making his assessment, Fleming considered indicators such as an improvement in consumer sentiment and the fact that households are now paying off their debts while also having greater access to credit. Fleming notes that with both house prices and mortgage interest rates at rock-bottom-lows, housing affordability is rising rapidly.
Paul Dales, the chief economist at Capital Economics, agrees that the housing market shows signs of improvement. “It is clear that housing recovery is now well underway,” says Dales. The National Association of Realtors reported that home sales increased 5 percent in December 2011, and existing-home sales increased 1.7 percent in 2011, with a total of 4.26 million homes for the year.
Investors continue to make up a significant portion of existing-home buyers, reports Krista Franks of DSNews.com. Cash sales, which are commonly associated with investors, accounted for 31 percent of December’s existing-home sales, a 3% increase from November.
Billy Rose, co-founder and president of The Agency shares: “Our experience on-the-ground is consistent with what industry experts are saying. We find that investor types are actively in pursuit of quality properties and no longer just distressed properties. We’re seeing owner-users finally getting off of their hands and actually putting pen to paper. Our showing volume and the number of escrows is up, and this sentiment seems to be gaining momentum.”
For more on the housing market outlook for 2012, read Mark Fleming’s report here.
Photo above: Our listing at 4530 W. 8th Street in Hancock Park.