Will 2012 Bring a Housing Recovery? Some Experts Think So

December 26, 2011

2012 housing marketImproved jobs numbers and stabilized prices for nondistressed homes leads investment bank Barclays Capital analyst Stephen Kim to believe that a housing market recovery is on the horizon. This is great news for those that own Chicago real estate.

Key to his prediction though is the fact that prices for nondistressed homes will have stabilized without government support. “In the absence of a government homebuyer incentives, prices for non-distressed home sales have stabilized for almost a year,” Kim explained in a recent HousingWire article. “This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of nondistressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices.”

Recent economic data, including November’s increased job creation, a rise in housing starts and improved homebuyer traffic, all point to some improvement potential in the sector, says Kim.

When the federal homebuyer tax credit expired in the middle of 2010, the housing market was left to fend for itself, “without training wheels,” says the article; yet, prices in housing markets have remained stable.

With their new market outlook, Barclays upgraded the stock to buy on the nation’s largest homebuilder, D.R. Horton, and raised price targets for D.R. Horton and other national homebuilders, Lennar, Toll Brothers and Meritage Homes. Barclays also raised its 2012 earnings-per-share estimates for D.R. Horton, Lennar, Meritage Homes, Pulte and Toll Brothers.

Kim’s conclusion in the article is that housing’s recovery will happen when first-time buyers decide it is safe to buy a home again. What do you think? What are you seeing in Chicago real estate? Have you seen improved traffic and increased starts? Do you think they key to the recovery does depend on first-time buyers? What about the government staying out of the equation? Let us know what you think!

Categories: Economy, Featured

About The Author

Read All Stories By Carol Morgan

Carol Flammer is a public relations and social media marketing expert, strategist and consultant. With 20 years of experience, Carol has established herself as the “go to” for real estate and construction products public relations and social media. Carol is president of Flammer Relations, Inc., and managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Atlanta and Chicago.

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