Cautious optimism best describes Windermere Real Estate’s outlook for 2012. Other terms heard are “favorable”, “improving” “more balanced” and “encouraging”. Real estate, like politics, essentially is a local matter; consequently our opinion only relates to the Poulsbo and North Kitsap markets.
Several factors bring us to this auspicious prognosis. Most important is the new realism of buyers and sellers. Facts show that home prices have bottomed out and are no longer falling. Interest rates are at historical lows. Home affordability, (monthly mortgage payment divided by income) has never been better. Job growth and business investment are rising and the navy is increasing its presence. These positive economic indicators combined with our compelling lifestyle choices and proximity to a world class city convince buyers to make this their home and to “take root” in our community. And now is an opportunistic time to do so. Buying activity is clearing increasing and without the benefit of government incentives, (the First Time Home Buyer tax credit).
Likewise, sellers now realize that we are not going back to price levels of four years past. Homes are now fairly priced and the current market conditions are the “new normal”. Home appreciation will likely return to healthy (and sustainable) levels of 3% to 4% annually. If you are expecting your home’s value to return to peak levels of 2007, be prepared for a long wait. The substantial inventory of distressed homes with homeowners “underwater” will prevent any spike in prices in the near and intermediate future. This truth will be seller’s adversary for several years. So sellers who desire or need to make a move, must recognize that this is “the hand they were dealt” and their task is simply to play it as best they can.
And you can sell your home, if it is priced properly and in good condition. These two terms are non-negotiable. Over priced homes do not sell. Buyers are looking for value and appraisers are insisting upon it, (sometimes to the extreme). If your home has deferred maintenance or structural/water issues, you have a problem and it must be corrected. Fresh paint and flooring work wonders. If your home needs a new roof, get one. Call your local charity and donate unneeded personal property. Hire a cleaning person to put your home in “show” condition. Head outdoors and get some exercise by cleaning up the yard! This, combined with competent professional counsel, is required to maximize your return.
So yes, we are guardedly hopeful that 2012 will be a better year for real estate. Improving economic conditions, cheap money, a great place to raise a family/retire and pragmatic sellers all point towards an enhanced market. So, for some, it is the best of times, others not so good; regardless…this is the only time we have. A Happy and Blessed New Year to all!
Windermere Real Estate – Poulsbo