Is it Possible the Housing Crisis Will End in 2012?

Major National Players Predict Housing Recovery in 2012

Housing Crisis End 2012?A couple of articles from DSNews have caught my eye this year. They involve heavy predictions of ends to the housing crisis and a dramatic improvement in housing prices.

The first article, Housing Crisis to End in 2012 as Banks Loosen Credit Standards, is titled a bit grandiosely for certain. But it would be wonderful to believe that their predictions could be true! I have no problems with the data they quote. It’s great to see that:

* The average credit score for lending has stabilized at 700
* Banks are lending up to 3.5 times earnings (up from during the worst of the crisis)
* Loan-to-value ratios are up from 74% to a much more attractive 82% LTV

The sources of the data include the analytics firm Capital Economics and the Fed Senior Loan Officer Survey.

Other Good News — Prices May Finally Begin to Recover

Yep, this is the other “yeehaw!” we can look forward to if DSNews and other real estate sources can be believed. We’ve seen for certain that here in the Denver area, inventory has taken a sharp decline recently. That’s brought on a lot of predictions that prices will take an upswing due to the simple and powerful laws of supply and demand.

Another indication that the doom-and-gloomers may have been wrong that housing prices would fall farther before climbing back up is addressed in the article Forecasting Home Price Recovery: Turnover Rate as a Powerful Indicator.

In short, the data on turnover rates would seem to indicate that savvy investors both at home and abroad have jumped on the low prices quickly enough in many markets to cut short any further drops and will actually spark a recovery!

The authors of these articles made sure to point out that outside factors could at any moment cut in and change the housing market recovery dramatically, but let’s keep a focus on the potential in their analyses and all take a little ride on that ‘silver lining’ for now!