After finding the bottom of the market in 2012, most economists agree with CoreLogic that housing is set to see healthy improvements in 2013, marking a slow but positive recovery.
Housing in 2012 a “pleasant surprise”
CoreLogic Chief Economist, Dr. Mark Fleming called housing in 2012 a “pleasant surprise,” pointing to 2012 as the first year “not beset by any major economic shocks,” pointing to the Japanese tsunami, the Great Recession of 2010, credit rating downgrades and poor confidence levels in years past. “Gladly, the risk of a recession due to shocks of 2011 has been largely averted.”
The information provider released its January MarketPulse report indicating that home prices rose 7.5 percent in 2012, the largest annual increase seen since 2006. CoreLogic predicts home prices to rise another 6.0 percent in 2013, pointing to affordability conditions fueling steady demand, lower inventory levels, and a lower level of REO sales.
Although AGBeat continues to assert that housing has not recovered, but found its bottom in late 2012, and saw several economic indicators improve, most notably total home sales, which rose 6.0 percent in 2012, the first increase in eight years.
In 2012, non-distressed home sales rose 11.0 percent, new sales increased 3.0 percent, and home price growth occurred in most regions. Marking the third annual consecutive decline, REO sales dropped more than 20 percent in volume while short sales rose 23.0 percent, the highest level since the housing decline began.
The most hopeful sign for housing is that serious delinquencies fell to 6.9 percent from 7.4 percent in 2011, having falling by one million delinquent loans since the January 2010 peak.
Housing to improve in 2013
“Rising home prices will continue to slowly release pent-up supply as under-equitied borrowers are unlocked and opportunistic sellers begin to provide relief to tight inventories,” according to CoreLogic.
Additionally, the company forecasts that geographic diversity in home price growth will continue and that delinquency levels will continue to improve.
The National Association of Realtors has recently made statements that lending conditions remain too tight, calling for “a more sensible lending environment.”
Echoing the trade group’s concerns, CoreLogic’s positive outlook for housing comes with the caveat that “Despite improvements and a positive outlook for the coming year, uncertainty remains on the impact of qualified mortgage and qualified residential mortgage requirements.”