My perspective: Edina Realty's president offers 2013 local market predictions

Looking into 2013, national real estate and economic professionals are optimistic that the market will continue to see steady recovery.

Local predictions from Edina Realty president Barb Jandric

• Expect historically low rates to continue; rates are not expected to exceed 4 percent
• Traditional home sellers will dominate the market again in 2013
• New construction will be on the rise in Minnesota and Wisconsin and will be visible on a level unlike what we have seen for many years
• Some value appreciation is expected to occur – about 4 - 5 percent
• Upper bracket homes sales and prices, which tend to be the last to recover,
  will stabilize and start to increase
• Expect continued challenges and increased information required to secure financing

National market predictions

Freddie Mac

• Home values are expected to continue to increase 2 - 3 percent nationally
• Mortgage rates may start to rise in the second half of 2013, but are expected to stay below 4 percent
• Household formation is expected to increase by 1.20 to 1.25 million

Source: Economic and Housing Market Outlook for December

Lawrence Yun, chief economist for the National Association of REALTORS®

• Homeowner equity should see a trillion dollar accumulation next year, based on price increases of 4 - 5 percent
• Based on the expected increase in household formation, Yun predicts a mulit-year housing market recovery
• Yun described the current all-time low mortgage rates as a "once-in-a-lifetime opportunity"

Source: Real Estate Today interview

Forbes

• Home prices will rise, but modestly
• As the job market slowly improves, household formation will increase as adult children can afford to leave their parents' homes
• The increase in rents has made ownership more affordable in many areas; this will probably continue

Source: Forbes Magazine