Prices are at decade lows and interest rates are at historic lows. She sees the market improving in 2012, but there are some outside factors that could possibly slow the recovery.
"This year a crisis like the European debt situation could trigger inflation and send mortgage rates up, or prices could rise. This is the year many people will look back and wish they had bought a home because these conditions aren't going to last forever," she says.
With an extensive background in housing finance and a new position on the board of the Kansas City Federal Reserve, Ms. Kelly has access to the best available data. But she doesn't rely on Case-Shiller because its monthly price index takes so long to come out and she doesn't trust inventory numbers because of the distortions caused by the shadow inventory and the robo-signing scandal delays in foreclosure processing.
In fact, she doesn't pay much attention to national real estate data, which she regards as helpful, but with proper perspective. The public must understand that real estate statistics varying widely from community to community, she points out. Since there is no such thing as a national real estate market, she considers the dissemination of national data misleading to the public
To find out what's really going on, she listens to the RE/MAX brokers and agents across the nation. RE/MAX also publishes its own monthly housing report covering 53 metropolitan markets across the nation. It its most recent version, November home sales were 8.1 percent higher than November 2010, the 5th consecutive month to show a year-over-year sales increase. At the same time, the number of homes for sale, or inventory, continued to fall for the 17th straight month. November home prices were 1.4 percent higher than October, making the 5th month in 2011 that prices have risen month-to-month. However, home prices remained 4.2 percent lower than prices in November last year.
"Markets are stabilizing. Rates are low for buyers. Investors are accounting for 20 to 25 percent of sales and foreign buyers are accounting for 82 billion in sales," she explained.
Unlike some who see a generation gap in attitudes towards housing between the Echo Boomers and their parents, Ms. Kelly sees a need to communicate better. "We have to understand the differences. There is a huge pent up demand for homeownership." she said.
What about the dramatic decline in homeownership rates over the past four years? The decline of one point in the homeownership rate represents 1.4 families moving from ownership to rental.
"Temporary," predicts Ms. Kelly. "Homeownership rates will rise because even in the minds of the majority of renters, the American dream of home ownership is still very much alive. It's an incredible time to buy and if you don't, you just might regret it."
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