Where Is Residential Real Estate Headed In 2012 in Nevada?

                                        

As the year 2011 keeps chugging along, there are definite signs out there that the Real Estate market are slowly picking up steam. National news has been indicating the last few weeks that Real Estate sales have been increasing but home values (generally) have been falling.  There are a few markets that this is not the case such as San Diego, San Francisco, South Dakota, and even some part of Florida where home values have steadied or slowly increasing.

Nevada, the state I currently reside in, are still seeing the grunt of the post recession Real Estate Bubble.  The State still leads in the number of Foreclosure filing for the month of April.  Due to the high volume of Bank owned homes and shadow inventories, prices are still remarkably low compared to any other times in recent history.  The fact that it takes more money to build a new construction home than to pick one up currently for sale is crazy. So, if anyone out there looking to buy a home, there could be no other better time than NOW!

So, where is the Real Estate Market in Nevada headed in 2012?  Will the price go down, or go up? Is this the best time to be investing in Real Estate?  Are the opportunities still there to succeed in becoming a Real Estate agent? 

These are the questions I frequently hear being a Real Estate Broker here in Reno, Nevada.  Many people are very curious on what opportunities the Real Estate market offers.  Well, here are my short list of answers I usually give to those who ask.

1. Where is the Real Estate Market in Nevada headed in 2012?
Answer:  Hard to predict. 

The one certainty of the current Real Estate market is that it is very uncertain.  About a year ago, I saw a huge spike of short sale homes entering the market relative to homes being offered as foreclosure.  Now, I see as much foreclosure homes as short sale homes entering the market in Reno, NV.  I do expect that more foreclosure homes will enter the market within the next 12 months. home selling will be faster next year than this year due to the shorter transaction time to close foreclosure homes compared with short sale homes.  I believe more Real Estate Investors will enter the market in hope of grabbing great deals.  Buyers will see lower priced homes by 2012 (compared to this year), and more sellers will default on their home loan payments for a variety of reason (i.e. Strategic Default, loss of job, Divorce, etc). 

2.  Will the price go down or up in 2012? 
Answer: Price will still go down in 2012.

The after affect of the Great Recession is massive.  I believe that the great recession is actually a modern day Great Depression.  Just like the Great Depression of the late 20's and 30's, our Great Recession is a generational occurrence.  Millions of home foreclosures, Billions of lost home values, and Trillions of lost paper assets (wall street) due to bank bailouts, could cause an extended delay of home prices inching back up in Nevada.  However, one thing is for certain; what comes down must come back up.  So expect home prices to go up, just not right away.

3. Is this the best time to be investing in Real Estate?
Answer:  Depends on what you mean on the word "Invest." 

For speculators (home equity watchers)  and flippers, probably not.  For Cash Flow investors, more likely "Yes."  Prices are so low in Nevada that in renters are actually starting to pay more in rent than do homeowners pay in mortgages for the same house.  Cash Flow Investors are receiving rent money much higher than the the mortgage they pay on the loan.  When the price was sky rocketing in 2004-2007, more speculators and flippers were entering the market. Cash flow investors were out during those times.  Now, its the other way around.

4. Are the opportunities still there to succeed in becoming a Real Estate agent? 
Answer: Yes! 

With the rising REO (Real Estate Owned) foreclosure homes entering the market, the price of homes being so low, and the down payment assistance that the government gives to the housing market, this is definitely a great time to be in Real Estate.  What I have learned being in Real Estate for over a decade, the Real Estate Market is a "Market."  Opportunities are out there if you search hard enough.

What Now??

Patience.  Residential Real Estate in Nevada are currently going through a very massive change of  event. Renters are becoming buyers, Sellers are becoming renters, and Investors are becoming landlords. The Real Estate world we have known back 5 years ago no longer exist. A new world has been created through all of this.

However, Residential Real Estate of 2012 do have one certainty; that it is definitely very uncertain.

Erwin Sigua, Broker/Owner Entrepreneur Real Estate 2011
Author, Trainer, Real Estate Sales coach