It appears there is some good news for real estate players here as we close out 2011 and approach the dawn of 2012 although it may be tenuous at best, according to a comparison of statements released by industry groups.
A study released by Deloitte Real Estate Services says the U.S. commercial real estate market “appears to be on a gradual but uneven path to recovery with increased capital availability, transactions and improved fundamentals.” However, “a potential pause in recovery momentum” exists due to the European Debt Crisis, continued high unemployment rates in the U.S. and the high rate of maturing debt levels.
The Associated General Contractors of America released a study that says private construction spending increased for the first three quarters of 2011, but investments in the public sector continue to rapidly decline.
The National Association of Realtors reports pent up demand exists “from buyers who normally would have entered the market in recent years,” and that homeowner default rates now are lower than at any time in history.
A press release issued by the American Institute of Architects says that “there has been a definitive shift away from large residential subdivisions towards smaller-scale infill development projects with a greater emphasis on affordability, access to public transportation, commercial opportunities and job centers.”
Fannie Mae's November Housing Survey, which gauge’s consumer confidence, finds that during the next year 22 percent of homeowners expect home prices to increase, 22 percent expect a decrease, and 53 percent think values will remain unchanged.
And yet another study released by credit reporting agency TransUnion finds that mortgage delinquency rates should decrease in 2012 as long as the U.S. economy continues its move into positive territory.
For now, a 30-year fixed-rate mortgage remains at less than 4 percent, but a forecast by New York based investment banking firm Keefe, Bruyette and Woods, Inc. says the rate of 10-year treasury bonds should rise in 2012 because the Federal Reserve will not purchase enough mortgage backed securities “to keep mortgage rates from rising to 4.7 percent by the fourth quarter of 2012.”
What does all of this information mean? According to BusinessWeek, “…even the worst hit markets will begin to see improvement (in) 2012.”