As we enter this great New Year, we’re left with many questions about our Nation’s economy, and more importantly, what it means for our own financial situations. These past few years have been rough on many families, and it’s no surprise that everyone is looking for the light at the end of the tunnel. One of the biggest hits Americans have endured is the real estate market plummeting, swallowing many people’s entire life savings in one foul swoop. Each year that passes, optimistic homeowners look towards the future in hopes that the real estate market will start to turn around. So what’s in store for us in 2013?

Well, according to Forbes Magazine, the housing market is expected to improve, but at a very steady pace. There will be no kind of “boom” to say, and if you’re waiting on a sharp increase in housing prices, you may need to wait another decade. Banks, lenders, and housing professionals are still wary of any “too good to be true” prices or opportunities.

Our biggest problem in the real estate market is high vacancy. Some articles will blame foreclosures, short sales, shadow inventory, and upside-down mortgages, but the reality of our current real estate situation is that homes and apartments are sitting on the market while young professionals, families and individuals are staying at home longer, or cohabitating with other young families. The national housing vacancy rate is around 1.5%, and our high was 3%. This may not sound like drastic numbers, but when you realize it’s double the national average, you can begin to see where the problem lies. We’ve finally lowered to about 2.1%, but until we can get back to the 1.5% range, we’ll still see the Berkeley real estate market slowly recovering.

Many analysts would look at the housing vacancy rate and assume that more Americans are renting. This is true, but it isn’t making up for the vacancies of houses. In fact, national apartment vacancies are around 11% right now, with the usual average landing us closer to 7 or 8%. While these numbers are all a little soft, and local numbers may vary, we’re still seeing that demand for housing is just too little, and the supply continues to sit unfilled. This also means more bad news for new home construction, an industry that’s taken the brunt of the economic blow. Luckily, 2013 will bring a bit of relief, but until the vacancy rates stabilize, we won’t be seeing any drastic changes.

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