Washington Real Estate Predictions 2012 [Video]
People ask “What do you think is going to happen to Real Estate in 2012?”
Here are my predictions for Washington Real Estate, the greater Seattle Metro and the real estate market at the national level. Yeah we know you shouldn’t make predictions but these are just my thoughts…Cheers!!
Thank you everyone for joining me again. What I’ve decided to do is I want to do . . . no, not I want to do. People have always asked, “What do you think is going to happen in 2012?” So, this is my real estate predictions for 2012. What we’re going to do first is we’re just going to talk about local and then we’re going to talk about national.
So here in Washington, I think we’re still going to see depreciation. So, Washington as a state is still depreciating. I think it’s going to depreciate at least another 3% to 6% on the statewide level. The Seattle Metro, Seattle’s looking good, but when you move down into the Tacoma area is still decimated, and you start moving north into Snohomish County, we’re still seeing problems in those areas too. For instance, Snohomish County finished up the year down 12%. I believe that trend is definitely going to continue. King County, specifically that Seattle/Metro right there, finished down about 4.5% to 5%. So I think we’re still going to see depreciation specifically in the areas we work. We work that greater Seattle/Metro.
I think foreclosures, if the stats and trends are telling us what’s correct, 2012, maybe the beginning of 2013, foreclosure activity is going to peak in the area. The reason for that, what you’re seeing right now the Notice of Trustee sales are declining, but the level of REO inventory is remaining constant. In other words, there are still properties that are being foreclosed on that are coming on the market, but there are less Notice of Trustee sales coming in the future. Therefore, if we run out of Notice of Trustee sales, we’re going to run out of foreclosures. So this may be the year we peak.
Short sales, we’re going to see more increase in short sale activity. The reason for that is the negative equity situation. The negative equity will continue to be there. Short sales will be coming more acceptable. I think conversely right along with our short sales is we’re going to see more approval of loan mods. I saw some of my first loan mods, where people were doing what they called shared appreciation. I think that’s a phenomenal idea. What they’re doing is they’re taking off a percentage of the total amount of the loan balance that’s due, and then they’re sharing in the appreciation. If you want people to stay in their homes, take $100,000 that they’re off. If they’re underwater $200,000, you’ve got to give them something to stay.
Sales for overall Washington and for the King, Snohomish, and Skagit counties actually ended slightly up a few percent. I think that trend is going to continue. I don’t think we’re going to go back to the glory years just yet, but I believe that trend is going to continue.
Unemployment for the state is down, and specifically, like in Snohomish County we went down to 8.5%. I believe that trend is going to continue. Boeing is still hiring. You’re seeing Microsoft being a mover and a shaker. Amazon is out there. So we have major employers here in Washington who seem to be cranking up the hiring.
Builders. Builder inventory is unbelievably low in the state of Washington. I think it’s going to continue to be low. The only way builders can get out of this is by cash. So they have to have cash to buy these projects in order to be able to go out and finance or move in the new ones. So it’s slowing down the builders’ step, but we’re not seeing builder lots being built. We will run out of lots, most likely in 2012, which will create demand, which of course in turn will help the market. If you’re looking for a trusted and reasonable New Braunfels home builder then contact Hllside Custom Homes. Custom home builder New Braunfels are the best solution for your new project.
Supply. Supply is still trending a downward direction. I think we’re going to get into some areas of Washington will have a very strong sellers market. Specifically, like in the Snohomish County market, Snohomish County is at about 4.5 months’ worth of supply right now with that trend going down. Same thing for the Seattle/Metro.
Now we’re going to work on the national stuff. Nationally, I think interest rates are most likely going to go up. Ladies and gentlemen they are at 45 year low. If you’re a betting man or woman at a 45 year low, do you think it’s going to go down or up? I’m betting it’s going to go up. The reason interest rates are so low right now is the government is keeping them artificially low. They are doing what they can to influence them. This can’t go on forever without inflation rearing its ugly head. I think our economy is starting to show slow signs of growth. I think our economy is going to continue a slow, yet steady path to recovery. Emphasis on slow.
QE3, quantitative easing, I don’t think this is going to happen because the economy is growing. There were rumors that might happen.
Lenders, I think lending criteria is still going to continue to be really, really stringent. I think it’s actually going to continue to be more stringent. FHA just came out last week and what FHA said was they are going to require buy-backs on their mortgages that don’t meet their underwriting standards from the lenders. In other words, they’re forcing higher standards. You’re going to see more higher standards from lenders. This has to get worse before it gets better. I think you’re also going to see more government intervention. The government is going to continue to try and make laws, rules, and all these things to help fix it. It’s in the past. You can’t really make all these laws and rules now to go fix it. You’re just muddying up the system a little bit more. I think some government oversight is absolutely necessary, don’t misunderstand what I’m saying, but I think creating a bunch of legislation hampers business overall.
Also, I don’t think the world’s going to end in 2012. I think it’s going to be phenomenal. I think we’re going to have a lot of fun. The Mayans just got tired of building the big old calendar, people. I mean really, it was big enough. They’re like, “Yeah, we’re going to be so old. We’re going to be dead. Our bones are going to be dust. It doesn’t matter. We don’t have to go past 2012.”
Anyway, that’s my thoughts and ideas. Leave me your thoughts and comments, and we’ll chat later. 🙂
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