There's no way to be certain what 2012 will bring. However, a few things do seem clear enough to make some assessments. First, 2011 was not the recovery year it was expected to be. It was yet another "transition year" for most. Second, multi-decade low mortgage rates and suppressed home prices coalesced to form an attractive purchase environment. And buyers did just what their name implies. This has driven down inventory levels in many locales, which—thirdly—nudged the market balance toward equilibrium. Here's how the final month of 2011 concluded the year.
New Listings in the Milwaukee region decreased 10.1 percent to 1,092. Pending Sales were down 4.4 percent to 624. Inventory levels shrank 13.1 percent to 8,495 units, extending the signature trend of 2011.
Prices were off a bit. The Median Sales Price decreased 3.3 percent to $163,400. Days on Market increased 0.8 percent to 121 days. Absorption rates improved as Months Supply of Inventory was down 13.9 percent to 8.7 months.
Ultimately, the upcoming spring market should be a major tell about the future direction of housing. Sellers are seeing multiple-offer situations; buyers are seeing sub-4.0 percent loans; supply-demand trends are more balanced. When it gets down to it, that's a stable foundation and a far cry from 2009. While the fundamentals are better, the foreclosure situation and political unknowns remain wildcards. For now, enjoy the fresh canvas.
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