After at least four years of slow sales and Realtors getting out of the game, the residential real estate market made a turn in 2012 that brokers are hopeful can be sustained in 2013.
“Man. I wish I had my crystal ball,” said Joe Clement, broker owner of Re/Max Properties. “But if it continues like it has been the last six months, we’re going to have a great year.”
Clement said his office has closed 15 to 20 percent more sales in 2012 than it did in 2011. And that’s common at brokerages across the city. Clement said the regional Multiple Listings Service has seen 8,600 properties sell in 2012, the most since 2006 and up from about 7,900 in 2011.
“The main thing that has caused it is low interest rates,” Clement said. “You can get a 15-year mortgage under 3 percent interest.”
If interest rates stay low, Clement said he’s optimistic home sales will continue to climb and prices will keep appreciating, which will position more people to be able to afford to sell their homes. The Federal Reserve has said it won’t raise interest rates in 2013, but it’s hard to say if they will stay at these record lows.
While most of the news is good and the real estate market is looking healthy, Clement said there are some concerns in 2013.
“Who knows what’s going to happen with this fiscal cliff,” Clement said. “The cut that worries anyone in this city is defense. That would have a big impact on housing whether you’re talking about active duty or defense spending that could hurt the contractors.”
Along with potential impacts of going over the fiscal cliff on our local economy, Clement said he worries about what Congress might do to the mortgage interest income tax deduction, which could be on the chopping block in deficit-reduction conversations.
“That would be devastating to our real estate market,” Clement said. “Everything would change.
“Right now, if we just left everything alone, I think we would have a good 2013. We’re just doing a bit of a dance because we don’t know.”