Any meteorologist worth his (or her) salt knows that in order to provide an accurate forecast, he’s got to do three things:
1) Check today’s conditions.
2) Check the history of pressure changes.
3) Check the current cloud cover.
In order to get a sneak peek into the future of housing, let’s take a lesson from our friendly neighborhood weathercaster (that’s what they’re calling themselves these days), as we anticipate the real estate climate of 2012.
1. Check Today’s Conditions: Housing Affordability
According to a report by the National Association of Homebuilders, housing affordability is UP:
“Buoyed by stabilizing home prices and sustained low interest rates, nationwide housing affordability during the third quarter of 2011 hovered near its highest level in the more than 20 years it has been measured, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data.”
2. Check the History of Pressure Changes: Builder Confidence
Before buyers can start buying, builders have to start building. Builder confidence is crucial to an improved real estate market. Says NAHB:
“Builder confidence in the market for newly built, single-family homes rose by three points to 20 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for November, released today. The gain builds on a revised three-point increase in October, and brings the confidence gauge to its highest level since May of 2010.”
3. Check Current Cloud Cover: Overall Current Economic Conditions
“Overall economic activity increased at a slow to moderate pace since the previous report across all Federal Reserve Districts except St. Louis, which reported a decline in economic activity.”
To check the cloud cover over our specific district, as defined by The Fed, we’ll have to look above the areas from Hawaii up to Alaska and down to California. We Washingtonians are part of what’s known at The Fed as District 12, where the following trends were observed during the reporting period of October through mid-November:
- Gains in retail sales
- Growth in manufacturing activity, specifically in metals and fabrication
- Flat real estate activity
- Moderate economic activity
In short: Things have been bad. Things have gotten a little better. Things continue to improve, but at a very slow rate.
My thoughts: Slow growth is better than no growth. Cloudy with a chance of sun, means a potential for SUN!
As you head into 2012, be encouraged by the (albeit slow and steady) economic improvement across the country. If your plans include buying or selling a house in the greater Puget Sound area, give me a call at 425-343-4545. I specialize in Snohomish County and am happy to show you around.
Photo Credit: Ponsuwan, used courtesy of Free Digital Photos