Apr
07

Deceleration is a Positive in the Current Real Estate Market

April 07, 2012

Acceleration is a word often used to emphasize how things are moving along in a forward manner. Nobody wants a car that has no acceleration. Likewise, people always want their careers to accelerate upwards and onwards. Yet in the current Chicago real estate climate, acceleration is a term that has not been used often in the past few years.

While slow growth has become a cliche when talking about real estate as of late, there is another way to look at the situation. Choosing to view the situation as a cup half-full as opposed to half-empty, economists are using the term ‘deceleration’ to describe the current housing market.

decelerationDeceleration? Isn’t that a bad thing? Unless a pilot is landing a plane on the O’Hare runway or a motorist is stepping on their brakes in Chicago rush hour traffic, who really wants to slow down progression?

The term deceleration when used regarding real estate has a positive connotation. How can this be? Put simply, even though housing prices are down, the pace of that downward spiral is actually slowing.

“The deceleration in the pace of decline is a first step toward ultimately growing again,” CoreLogic chief economist Mark Fleming said in the company’s news release.

CoreLogic recently released its home price index. The report, which includes distressed sales, showed U.S. prices in February dropped 0.8% from January and were down 2.0% from February 2011.

While this is initially not great news for the housing industry, it is important to note that the 2.0% drop from February of last year is the smallest annual decline in 18 months.

The Urban Land Institute’s Real Estate Consensus Forecast for March 2012 predicted broad improvements for the U.S. economy, real estate capital markets, real estate fundamentals and housing over the next few years. Furthermore, the ULI forecast calls for housing starts to nearly double by 2014, with prices increasing by 3.5 % in 2014.

With declines tapering off and positive predictions for the future, the word deceleration when applied to real estate is like a silver lining emerging from a very dark cloud.

Categories: Economy, Featured

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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