2012 Predictions for Real Estate in Muncie and Delaware Co, IN

As we come to the end of 2011 I want to look forward to 2012 and make some predictions about the real estate market in Muncie and Delaware Co, IN. 2011 was a very difficult year and when the final tallies are in, we're probably going to see unit sales down about 10% from 2010 and average sale prices about equal to 2010.The good news is that most of the problems were in the first half of the year and that 5 of the last six months have been better than their 2010 counterparts.

Looking ahead, I think 2012 will remain relatively flat with some improvements in the second half. There are more optomistic predictions beginning to appear in the media, but many of those predictions are based on improvements from very dismal prior years. If you look at the formerly "hotmarkets" like CA, NV and FL, many areas lost 50% or more of their previous values so it's not to hard to show improvements. In Muncie and Del. Co. our average sale price only dropped about 10% from 2006 levels and has been increasing over the past 6 months.

Market conditions are excellent, with low interest rates and attractive prices favoring buyers and low inventories favoring sellers. Our biggest problem remains the lack of confidence generated by all the negative financial news and especially by the lack of policy direction from Washington. Added to that is the uncertainty resulting from an presidential election year. Locally, we have a new and untried city administration and a governor election coming up. When faced with uncertainty people put off major financial decisions like home purchases.

On balance, I think our unit sales will rise in 2012 to somewhere in the 900 range, up from just over 800 this year.

Interest rates will rise slightly as the national economy improves, but will still remain below 5%.

Average sale prices will rise 8-10% as a result of low inventory and increased buyer activity.

New construction will remain slow but should improve from the very low levels of the past few years.

Best wishes to everone for a prosperous 2012.