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Jergler: Real estate experts share predictions for 2012

December 19, 2011|By Don Jergler

Editor's Note: This is a two-part story forecasting real estate experts' top predictions for the market in 2012.

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Perhaps sometime between now and Dec. 21, 2012, will be beginning of the end. In fact, some think the end is already here, and they welcome any prophecies for an end to it all now or any time in 2012 — but we're talking about the prolonged real estate market downturn here.

The new year brings with it lots of questions. Is the real estate market ready for the onslaught of short sales and foreclosures we've been hearing about, and if so will these "deals" drive down prices?

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Will home prices start a steady rise in 2012? If they do rise, could we see a radical upswing in the nation's median home price by, say, 25%? Or will they rise only slightly, or not at all?

Will the lending market remain tight until finally someone will do something about it? Will anyone do anything about it?

More importantly, will we all be able to look back and say 2011 was the bottom of the market?

As for Orange County, will pricey neighborhoods like Laguna Beach and Newport Beach lead with way in homes sales? Or will Santa Ana be a hotbed of selling activity?

Three real estate experts offered their top predictions for 2012.

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Lisa Dunn, Realty One Group, Mission Viejo

1) Buyer confidence levels will remain low due to election-year mud-slinging. Bad news is sexier than good news, so the candidates will all be hammering on the bad economy. It all may not be true or accurate, but it's all about perception.

2) I think many people will look back at 2011-12 and kick themselves for not buying investment properties or move-up homes then, due to the combination of record low interest rates and low prices. Too late to "sell high-buy low," but if you can take advantage of low rates and low prices today, do it.

3) Toward the end of the year I think we will see the beginning of former homeowners who are now renters looking at becoming homeowners again and for the right reason. After having to answer to a landlord and not gaining anything from their rent payments, I think they will be inclined to purchase a home for the freedom that only home ownership can bring.

4) We may see some home retention programs that might actually work. This will be a combination of government and private enterprise finally coming up with something viable. This could greatly reduce the number of short sale listings and return some normalcy to the market. This is more wish than prediction, though.

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