The real estate market is a good gauge to judge whether the economy is either on the right track or failing miserably. The past year was good for some, and not so good for others. Throughout 2012, the impending fiscal cliff combined with Europe’s economic recession kept the economy in the United States moving at a snail’s pace. The real estate market is affected by this, and has crawled slowly; making small gains while still well below the market activity most Americans are used to.
2012 was a stabilizing year for the real estate market, but it is now clear to those in the industry that they were at the bottom of a large precipice they have to climb. Sellers, lenders and other real estate professionals had poor years in some areas, with the hope that 2013 will be more fruitful.
Home owners are still in some trouble. Nearly 23% of home owners are in trouble with their mortgage or are dangerously close to being so, according to CoreLogic. This is one example at how while some want to ensure to the public the market is recovering, there is a long way to go.
Zillow estimates that the real estate market grew in value by about $1.3 trillion, which is the first year of cumulative gains since 2006. The overall prices of homes being sold are up around 2%, so that is another positive sign. Overall sales are still low, but they are up significantly from 2011. With such low demand, new homes are still low, while older homes at lower prices are seeing less time on the market.
The number of foreclosures was high, but also showed signs of improvement when comparing the statistics to 2011. Coincidently, mortgage rates are at historic lows. If a buyer has good credit, they can get fantastic deals.
Despite the low rates, millions of Americans are still in financial trouble. With them being unable to afford their payments, they are unable to refinance and receive a better deal.
Looking back, 2012 was a year where things started to turn around. If the country falls back into a recession, all the progress that was made will disappear fairly quickly. An important number for those considering entering the market is the unemployment rate. If the rate get healthier over the next year, there is a good chance the market will be making even more progress than the last year.