California Home Price Predictions for 2012

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California home price predictions are always a hot topic as we close in on the new year.  Last week I asked you about your predictions for California home prices and home values in 2012 in our reader poll.

The results are in and I have to be honest, I’m not surprised.  You have a pretty good handle on what’s going on in the market.

2012 Home Price Survey

We did a similar poll for home price predictions for 2011 and the results were similar in regards to the majority opinion that home values would decrease.  As you can see, expectations for declining home prices/values were quite a bit higher last year.

2011 Home Price Predictions

Home Values Dropped in 2011 – Home Buyers Win

The most recent numbers from DataQuick, the foremost authority on real estate data and reporting, show that home prices did indeed drop Statewide but were mixed by region.

2011 California Home Values - DataQuick

As you can see, home prices/values dropped almost 5% Statewide in 2011 compared to 2010.  Falling home prices resulted significant increases in home sales in both Los Angeles and Ventura counties which resulted in a net increase in home sales of .5% in Southern California.

We saw similar trends in the Bay Area of Northern California with significantly increased sales volume as a result of declining home prices almost doubling that of Southern California.

Bay Area DQ Home Values

What can Home Buyers expect in 2012?

I personally think we will see similar numbers in 2012 as we saw in 2011.  I am inclined to be believe that home prices will continue to drop through 2013 in many regions of California resulting in many regions experiencing an increase in home sales due to an increase of foreclosures and distressed properties as California’s vast shadow inventory works it’s way out.2012 California Home Price Predictions

Home buyers are still in the unique position of being able to take advantage of low interest rates and low prices.  This is a unique market for home buyers in 2012 as the Government continues to artificially keep interest rates low and efforts to provide relief to underwater homeowners remain minimally effective.

Home buyers should keep in mind that this is NOT a normal market!  The conditions we are seeing today greatly benefit home buyers that can are will enter this market.

What can Home Owners expect in 2012?

Unfortunately, as I stated above, I agree with our readers that home values will continue to struggle in many regions of California.

Many of the Government programs intended to help upside down or struggling home owners have not really produced the results that many expected.

FHA streamlines continue to be a great option for those home owners that have FHA financing on their home currently.

The new HARP 2.0 program looks extremely promising for home owners whose home loans are owned by Fannie Mae or Freddie Mac.

Details are still being released on the HARP 2.0 program.  I will keep you updated as we find out more.

If you have comments or questions about home value or home prices in 2012, leave a comment below or feel free to chat live online with a loan specialist now.

If live chat is offline, simply submit your question and we will get back to you as soon as we can.

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2 Responses to California Home Price Predictions for 2012

  1. Philip January 28, 2012 at 5:09 pm #

    According to Zillow we owe exactly what are house may be valued at, but I am betting we are underwater. My wife is about to divorce me and I will obviously be unable to pay the home loan. If I were able to refinance the house from our current rate of 5.71 to today’s rate of about 3.75, then I could rent the home until the market comes back. Our only other options would be a short sale or possibly bankruptcy which we would like to avoid. Our current loan is through Wells Fargo. She wants out ASAP!

    • Legacy Content January 28, 2012 at 6:07 pm #

      I’m sorry to hear about your situation – I think you’re probably pretty safe assuming that Zillow is not an accurate reflection of the value of your home, it’s not meant to be accurate. If you are going through a divorce, chances are the home will be addressed in the property division stage of the process.

      Have you looked up your address to see if the loan is owned by fannie mae or freddie mac? Any chance your home loan is an FHA or VA home loan?

      You may have options for reducing the rate. Both you and your wife will have to cooperate on the refinance if there are indeed options available.

      I appreciate your comment, I’m not quite sure how I can help unless you’re in Golden State, I can look up your home loan and try to determine if there are any financing options available to you know.

      You mentioned short sale or bankruptcy as your options – a bankruptcy will not relieve you of your home loan obligation, it will only protect you against a deficiency judgement should you default on the loan in the future.

      This is a very difficult situation, I understand that. Your options as you’ve described them may not accomplish what you think it will.

      If you would like to give me a call to try to at least narrow down some of these options, I would be happy to try to point you in the right direction.

      My cell number is in the “author box” just above.