A growing number of industry experts anticipate the housing market to reach its bottom in 2012, USA Today reports.
After nearly five years of consecutive declines in home sales, property values and housing construction, according to the newspaper, industry optimism is strengthening.
During 2012, home sales and new home construction are expected to increase following one of the worst years for the real estate market since the Great Depression. Real estate investors have started betting on the housing market to bounce back, by bidding on stocks that are relevant to home builders which has caused them to outperform the overall stock market.
"This year will feel a lot better to builders, investors and real estate agents than to consumers," Trulia economist Jed Kolko told USA Today.
Meanwhile, executives from major lenders have revealed to USA Today that as the housing market nears its bottom, it could remain there throughout the course of 2012, while low property values and affordable mortgage rates work to stabilize the market.
However, based on real estate data, other industry experts anticipate home prices to drop even further this year as a flood of distressed properties enter the housing market. The foreclosure process was nearly put on hold altogether during 2011 in the wake of the robo-signing process, while reviews took place.
The process is expected to pick back up, and the low price of these properties may continue to have a negative impact on overall property values, which have fallen by nearly 30 percent since 2006, the paper reports.
Despite the expected fall in home prices for another year, economists revealed to the news source that existing home sales could rise by as much as 12 percent in 2012 after falling by 2 percent in 2011. In addition, according to Moody's Analytics, new home sales could spike by nearly 74 percent throughout the course of the year.
Additionally, the construction of new single-family homes should rise by as much as 37 percent during 2012. This is coming off of a 9 percent drop in 2011.
Meanwhile, other positive economic indicators are showing promising signs for the overall housing market. During December employers added roughly 200,000 new jobs to the economy, causing a subsequent fall in the unemployment rate to 8.5 percent.