Real Estate developments in 2012

Increased Foreclosures

The shadow inventory of foreclosures has been growing and will ultimately be introduced to the market. And since distressed homes sell at discounted prices, they will impact the housing values of the non-distressed homes.

Increased Short Sales

Home prices will likely moderate through at least the first part of 2012. Falling prices could force more owners into negative equity positions. Negative equity can cause people to strategically default on their mortgages. This could result in an increase of foreclosures. But banks will likely take preventative actions to assist many of these homeowners avoid foreclosure, by lessening the requirements in short sale processes.

An expected return of Buyers

Since consumer confidence in the economy dramatically impacted the housing market in 2011, buyers were anxious to make a decision to purchase expensive items and real estate. Near the end of 2011, consumer confidence began to come back.  Economic conditions should continue to improve throughout 2012, again increasing consumer confidence.  As that begins to happen, buyers will want buy.

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