2012 Real Estate Predictions: How The Market Will Look Like ThisYear

The New Year has just wheeled in and everyone is excited on what it will bring. Many real estate

experts and analysts have had their say on what is to come for the industry. Here are some of them:

Second home sales are set to increase.

A recovering economy has encouraged many homeowners to invest in foreclosed homes for vacation

or retirement. Prices have fallen by as much as 50 percent in some parts of the country, which helps

fuel demand. Combined with low mortgage rates, homes are affordable as ever. This makes

foreclosure investing more desirable than mutual funds as supplemental income.

Oceanfront homes in California enjoy a lot of demand in the less-than-a-million market. However,

retirees may be better off in other states such as Washington and Oregon.

Amortization loans with 15-year terms are more desirable.

Everyone has seen the mortgage meltdown and the ensuing economic crisis of the past years.

Simply put, the age of 30-year mortgages is gone. In its place, 15- and 20-year loans are set to take

over. This allows buyers to build up equity faster because of the shorter term. On top of this, buyers

can also expect more savings from short-term loans than from longer ones.

Remodeling will become the latest trend.

In recent years, wanting another room meant having to buy a bigger house. Nowadays though, it is

much more affordable to add one to your current home. Both buyers and sellers will only incur costs

even in foreclosures. It makes more sense to build equity in your current home.

Although building materials have become more expensive, a simple remodel still will not break the

bank. Labor is cheap because of unemployment as well. In other words, now is the perfect time to

push through with your remodeling plans.

Short selling is on the rise.

According to executives from the Bank of America, short sale figures have dramatically risen since

2009. This trend is set to continue in 2012 and even beyond. Short sales are predicted to increase by

60 percent. Whether you think they are desirable or not, short sale homes will continue to populate

the real estate market.

VA loans will be all over the place.

Everyone is celebrating with the recent pull-out of American troops from Iraq. Veterans are now

looking to settle down and buy homes, finding Veterans Affairs (VA) loans very tempting indeed. With

zero percent down for qualified buyers and the seller's option to pay the buyer's closing costs, it is

very difficult to say no.

Vets are more likely to command respect because they are committed and serious buyers. It does not

hurt that they are qualified, too.

Bulk foreclosure sales courtesy of banks will be made available.

You have probably seen it in the news. Many talk of a "shadow inventory" where a good number of

homes have been foreclosed, but are still not up for sale. Indeed this is good news for anyone who

wants to give foreclosure investing a try. With bulk sales, the profit margin is wider thanks to steep

discounts. It is a great way to make money from real estate investments. Sherman oaks real estate