We never made any official predictions for the 2012 real estate market. I’m stunned that we didn’t do it because it’s a fun thing to think about, and after analyzing the year-end data we always have thoughts and ideas. We won’t make that mistake again this year … here are our predictions for the coming year.
1. Low inventory in the early months of the year is going to result in more multiple offer situations than normal, which buyers may not be mentally prepared for. As I’m fond of saying: You snooze, you lose. Make sure if you’re actively looking that you have your financing in order and make haste when going to view newly listed properties. Don’t think it’s okay to wait until the weekend to go see them. They may be gone by then.
2. The number of transactions is going to continue to increase in 2013. I think there will be at least a 10% increase in the number of transactions over 2012.
3. More urban locations will stabilize on prices, while popular suburban towns will see increases in prices. I believe Hartford, New Britain, and Manchester will see price stabilization, while Glastonbury and West Hartford will see a 2-4% uptick in prices.
4. Short sales will be processed more quickly and there will be fewer new short sale and foreclosure situations.
5. The condo market is going to continue to trend slightly downward on prices. The number of condo transactions will remain about the same.
6. Sellers will become more bullish about the market and will be tougher negotiators than in recent years.
7. Appraisals will become less of an issue as more data points are added for appraisers to use during their price evaluations.
8. We’ll see more move-up buyers this year, as interest rates will remain low, prices for selling their existing homes stabilize and they feel increased job security. This will further help push up sales prices overall as the increased demand for higher end homes raises the median sales price.
1. Deal volume will increase again, though not not by another 20%.
2. Buyers at the upper price points ($700,000+) will feel more confident and do meaningfully more deals.
3. Prices for single-family homes will rise noticeably in leading towns, and start to stabilize in lagging towns.
4. Condominiums will continue to look for the bottom in their market.
5. Mortgage rates will rise slightly.
Looks like the two of us have similar expectations for the 2013 real estate markets. And no, we didn’t cheat and just copy each other’s predictions. But we do talk about real estate all the time, so it’s not terribly surprising that our views are similar.
In summary, look for the momentum that the markets built up last year to continue into 2013 as the economy seems more stable and there are no obvious red flags on the horizon.