Being knowledgeable about the real estate market and the factors that affect it is the first priority for a real estate professional who wants to be able to provide clientele with wise counsel.

As a result, I spend a lot of time researching the local real estate statistics, news, and trends. I also spend a lot of time following the national real estate news as well as broader financial news to get a feel for consumer tendencies and sentiment. I also understand that general consumer apprehension has played a pivotal role in keeping buyers on the sidelines.

Every passing week I find myself gaining more confidence that real estate is poised to bust out of its slump in a big way, and my reasoning is simple… I have a suspicion that many buyers will come to the market when they get the feeling of "oh, the economy and real estate seem to be doing well." I personally cannot blame potential buyers for being apprehensive, because after all, real estate is a big investment. Though, at some point the veil will be lifted and the financial and intrinsic benefits of homeownership will begin to outweigh the concern that has kept many buyers on the sidelines.

So why do I think 2012 may be when the tide turns?

1. A stronger economy is crucial for consumer confidence, and I think a good example of a strengthening consumer base is news that Black Friday and Cyber Monday shopping revenues far outpaced analyst expectations. A stronger consumer base means we get positive news and headlines like the Black Friday shopping results, and this in turn improves consumer confidence. Stronger retail sales also helps put Americans back to work and falling jobless rates will improve consumer confidence. Ultimately, a more confident consumer is more inclined to move forward with a home purchase.

While on the topic of positive news that can improve consumer confidence, new home sales jumped 1.3% in October while the index of home builder sentiment also rose to its highest level since May of 2010.

2. The real estate market has been steadily improving and getting back to a more normal market. Locally, for example, home sales have been rather normal throughout 2011 while home values have trended mostly flat. Additionally, we have been making progress working through volume of foreclosures and short sales that affect the market, and the largest banks have become more inclined to complete short sales which keeps the more damaging foreclosure from making its way back to the market at a much lower price. Further, the supply of homes (months it will take to sell the existing inventory of homes for sale at the current pace of sales) has been holding around four months for the majority of the year, which is below the sixth month "neutral market" supply. A supply of less than six months means there is increased buyer competition for the homes available, which typically leads to escalating prices.

3. It is now more affordable than ever to own a home. I just read an article today from the Wall Street Journal about owning being more affordable than renting in a growing number of major cities. To illustrate the growing affordability, the article references how a monthly mortgage payment of $1,700 twenty years ago allowed a borrower to take out a loan of $200,000, while today they can get a $350,000 loan for the same monthly payment. Or, to put it another way, the $200,000 loan today would only cost a borrower around $970.

So, the stage is essentially being set for the breakthrough America has been waiting for. Real estate has traditionally pulled America out of previous recessions, and a stabilizing market mixed with a strengthening consumer base is the elixir needed to jump-start the real estate market.

I think we will soon be seeing more families making the decision to buy as they hear their friends, family, co-workers and even the media sound more confident in real estate.

- Robert E. Wasser - Bellevue and Seattle real estate analyst