Could 2012 Be the Best Year to Buy a Home in Decades?

Before you go, we thought you'd like these...
As spring buying season approaches, potential first-time homebuyers would be excused for feeling uneasy about jumping into the real estate market. After all, pretty much all housing news since the bubble burst has been, well, bad news.

But this may be the perfect time for prospective buyers to test the waters.

As of December, home prices had plummeted 34 percent since the housing bust, according to the S&P Case-Shiller index. That means you could buy a home, on average, for the same price it would have cost in 2002. Along with retro prices, mortgage interest rates continue to hover around record lows. The rate on a 30-year fixed-rate mortgage was 3.95 percent as of Feb. 23, marking the 12th straight week rates had stayed below 4 percent.

A number of reports corroborate the idea of a housing market whose affordability has reached near-unprecedented heights. The U.S. Department of Housing and Urban development said that homes are more affordable than they've been in 40 years, while the National Association of Home Builders recently stated that home affordability hit a 20-year high. The National Association of Realtors President Moe Veissi asserted that the "typical family has roughly double the income needed to purchase a median-priced home," something that's never happened since the NAR started keeping records.

"OK," you may be thinking, "maybe homes are affordable. But what does that matter if prices continue to fall? That loses me money, right?"

There is evidence in several markets that home prices' painful slide may finally be at an end. While home prices reportedly dropped 4.7 percent in 2011, some experts say prices will bottom out by the end of the year. NAR chief economist Lawrence Yun predicts that prices will actually rise by 2 percent in 2012.

30 PHOTOS
Most Popular Housing Markets
See Gallery
Could 2012 Be the Best Year to Buy a Home in Decades?

Median List Price: $186,000
Total Listings: 53,009
Median Age of Inventory: 138 days

Home Price: $4.995 million
Beds/Baths: 6/6
Sq. Ft.: 12,000

Users of Realtor.com searched for homes in Chicago more than any other city in January. With a little over 53,000 homes for sale, the city has ample supply for house hunters. 

Behind this luxury home's brick and limestone exterior, is a whopping 12,000 feet of space. The listing description claims the house offers just the right balance of public and private spaces. 

See the listing for more details

Arched doorways and exposed beams infuse the wide halls with an old-world feel. Other details include maple floors, leaded windows and period lighting.  

See the listing for more details

The first floor features an expansive recreation room and private gym. Upstairs is the home's "master bath," which comes with a vanity, makeup desk, whirlpool tub and vintage shower.

See the listing for more details

Median List Price: $81,700
Total Listings: 22,370
Median Age of Inventory: 70 days

Home Price: $290,000
Beds/Baths: 3/3
Sq. Ft.: 2,800

Speaking volumes to the affordability of Detroit housing, not one of Realtor.com's Detroit listings is priced above $1 million. 

This $290,000 home is high-end as far as the city's market goes. The apartment, which features waterfront views, dates back to Detroit's heyday when the American automobile industry was firing on all cylinders. 

See the listing for more details

The expansive living room offers a glimmer of its roots, with its hardwood floors and fireplace. Price per square foot of the dwelling is just $104. 

See the listing for more details

Pictured here is the home's elegant dining room. There are virtually no other city markets that'll deliver an apartment interior like this one for such a low price. 

See the listing for more details

Median List Price: $320,444
Total Listings: 26,858
Median Age of Inventory: 83 days

Home Price: $10.95 million
Beds/Baths: 6/9
Sq. Ft.: 13,699

Los Angeles' median home price may tower over the national median (which is below $200,000); but in coming in at No. 3 on our list, that apparently hasn't stopped prospective buyers from scouring the city's listings. 

This spanking-new, palatial mansion features floor-to-ceiling windows that display the home's jaw-dropping panoramas for all they're worth. 

See the listing for more details

The home's inviting infinity pool perches over the urban sprawl.  

See the listing for more details

In addition to otherworldly views, the $10.995 million home features a stark, contemporary interior.

See the listing for more details

Median List Price: $221,995
Total Listings: 21,693
Median Age of Inventory: 124 days

Home Price: $4,898,100
Beds/Baths: 4/2
Sq. Ft.: N/A

Philadelphia's median home price hovers above the national median by a considerable margin. The city has one of the highest average inventory ages on our list. That may induce more sellers to cut their prices. 

This apartment building offers some stunning flats that cost nearly $5 million a piece. 

See the listing for more details

The expansive interior has a sleek layout along with details that add a dash of swank. 

See the listing for more details

Philly's skyline waits outside floor-to-ceiling windows. The upscale apartment has access to an in-house gym and pool.

See the listing for more details

Median List Price: $169,500
Total Listings: 17,699
Median Age of Inventory: 69 days

Home Price: $2.75 million
Beds/Baths: 6/8
Sq. Ft.: 6,917

Phoenix-Mesa, bringing cheaper than average homes to the home-buying table, is fifth on our list. Perhaps luring flocks of bargain hunters, the area's homes are selling significantly faster than in most cities. 

This contemporary has a well-landscaped courtyard and guesthouse. The listing description plays up the home's privacy, which makes the home "feel miles away." 

See the listing for more details

The home's crowning feature is probably the pool pictured here, which sits between the guesthouse and main house. 

See the listing for more details

The stucco home also offers an artist's studio and three-stall barn, along with a pastoral field for horse-riding. 

See the listing for more details

Median List Price: $150,000
Total Listings: 48,705
Median Age of Inventory: 91 days

Home Price: $6.75 million
Beds/Baths: 8/12
Sq. Ft.: N/A

Atlanta has also drawn the interest of many prospective buyers, and its affordable median home price -- $150,000 -- may explain why. 

This rustic waterfront mansion represents the pinnacle of luxury in Atlanta real estate. 

See the listing for more details

The finely-finished home offers a giant kitchen whose kitchen island, with its eight stools, is so expansive that it seems more of a bar, than actual cooking space. 

See the listing for more details

Pictured here is the home's lavish great room. Its arched windows bathe the space in light. With eight bedrooms, the home seems tailor-made for clan getaways. 

See the listing for more details

Median List Price: $142,000
Total Listings: 18,827
Median Age of Inventory: 110 days

Home Price: $3,999,999
Beds/Baths: 6/8
Sq. Ft.: 6,763

Florida is one of the states hit hardest by the the housing bust with rampant foreclosures driving down home prices all around the state. So it's no surprise that buyers have the Tampa-St. Petersburg-Clearwater area in their crosshairs. 

This magnificent waterfront manse sits on some prime Tampa real estate. Price per square foot? $591. While that may strike you as exorbitant, keep in mind, pre-meltdown, this place's value surely dwarfed its current price tag. 

See the listing for more details.  

The home is decked out in luxurious upholstery. There are six bedrooms and six bathrooms. 

See the listing for more details

The house offers no shortage of windows, keeping the home's lush, tropical setting within reach. 

See the listing for more details

Median List Price: $189,900
Total Listings: 16,291
Median Age of Inventory: 94 days

Home Price: $6.495 million
Beds/Baths: 3/5
Sq. Ft.: 5,025

Dallas' median home price hovers around the national median, rendering it a fairly affordable city to your average American. 

This home, however, is not affordable to your average American -- but, hey, it's fun to look at. The contemporary sits on a one-acre lot that stares out at the Dallas skyline. Recently, the home's price was slashed to $6.49 million. 

See the listing for more details

The home features an expansive living area with soaring ceilings and floor-to-ceiling windows perfect for sucking in the stunning city sprawl. 

See the listing for more details

There's also a fully equipped kitchen that offers your fair share of marble countertops. The home is handicap-outfitted.

See the listing for more details

Median List Price: $155,000
Total Listings: 10,857
Median Age of Inventory: 81 days

Home Price: $3.99 million
Beds/Baths: 5/8
Sq. Ft.: 8,676

Another city still reeling from the housing bust, Orlando is attracting many bargain hunters eager to capitalize on low home prices. 

This mansion, constructed in 2009, recently had it's price cut to $3.99 million. It sprawls 8,676 feet, and has an exterior built largely of stone. 

See the listing for more details

The interior feels almost regal with its cherry-stained wood paneling, columns and crown molding. The chandeliers don't hurt either. 

See the listing for more details

Other highlights beyond its exquisite decor include the home's game room, hot tub and golf course views. 

See the listing for more details

Median List Price: $121,000
Total Listings: 21,665
Median Age of Inventory: 105 days

Home Price: $8 million
Beds/Baths: 6/8
Sq. Ft.: 13,489

Las Vegas took one of the biggest shellackings from the bursting of the real estate bubble, with its median home price plunging by more than 60 percent. It would seem that buyers are keen on taking advantage of the rock-bottom prices. 

This massive luxury home almost certainly used to be worth well over $10 million. Now the 13,489-square-foot behemoth is running for $8 million. 

See the listing for more details

Interior details include arched doorways, columns and coffered ceilings. 

See the listing for more details

of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

Another reason to house hunt this year is the abundance of discount deals stemming from distressed sales, which include foreclosures and short sales. On average, they yield a 30 percent discount compared to conventional sales, according to CoreLogic. And with the $25 billion mortgage settlement with the nation's biggest mortgage lenders finally on the books, the foreclosure inventory is expected to tick up in 2012, as lenders look to clear their backlog.

And to top it all off? The economy looks like it's actually on the upswing. The economy added 227,000 jobs in February, according to the Labor Department. And while qualifying for a mortgage may still be difficult for many buyers, for first-timers who don't have an outstanding mortgage to deal with, this may be a once-in-a-lifetime opportunity.

Follow Teke Wiggin on Twitter (@tkwiggin), follow @AOLRealEstate, or connect with AOL Real Estate on Facebook.

Also see: Top Real Estate Markets for Million-Dollar Homes

More on AOL Real Estate:
Find out how to
calculate mortgage payments.
Find
homes for sale in your area.
Find
foreclosures in your area.
See celebrity real estate.


First Time Buyer Recounts Home Buying Process
Read Full Story

Find a Home

Buy
Rent
Value
Powered by Zillow

People are Reading