Where does the San Diego real estate market seem to be headed for 2012? Once again at this time of year, when all the pundits come out with their forecast, it\’s the rare individual that does not go along with the real estate industry’s proverbial ‘now\’s the time to buy’ mantra. I\’m going to be part of the 1% who deviates from the traditional ‘by now before you’re priced out of the market’ end of the year talking points.

I bet you have an idea where I\’m going with my report for the Outlook for San Diego real estate values in 2012. Before I get into the meat of my forecast, let\’s take a quick look back at the titles of my prior forecasts for the real estate market and short synopsis of each:

2005 – – San Diego Real Estate — A Trend to Go National? (The big divergence between home sales and home prices seen here in San Diego indicated a dropping market and a real estate trend I thought would go national.)

2006 — San Diego Home Sales Figures: Not All That They Seem on the (industry and news reports indicated that San Diego home value drops were substantially less than what was occurring in the real marketplace. This was mainly caused by failure to consider all the concessions that developers as well as private sellers were offering to entice buyers to purchase San Diego homes.)

2007 — Is Your San Diego Home Appraisal Really Accurate? (This focused on the fact that many appraisers were overvaluing San Diego homes because they were not fully considering seller concessions that were taking place in the open market.)

2008 — San Diego Real Estate Market: What Did You Expect? (How the main-stream media still did not raise any real estate red flags in late 2005. Instead it was \’just a return to normal\’ or “a great time to buy without the pressure of multiple offers.\”)

2009 — California: Land of Sunshine and a Year of FREE Living (How many California underwater homeowners were living mortgage and tax payment free for a year or more before foreclosure)

2010 — San Diego Real Estate 2010 Forecast: The Year of the Strategic Mortgage Default (For 2010, San Diego housing will remain a risky deal that will again be dominated by government intervention. Until both the Federal and State governments get out of the housing market, a real bottom will not occur, thus San Diego housing values will continue to decline well into the next year.)

2011 — San Diego Real Estate 2011 – Year of the Short Sale: I personally do not see any real base building in the San Diego real estate market until 2012.

Now let\’s look at 2012 for San Diego home values. Back in the summer of ’05, one of the main factors for my calling a market drop was the drop in sales activity while home values continued to increase basically because of the lag time in reporting. Well, I believe the same could be occurring now, except in reverse! With sales increasing (hopefully this trend will stay in place) I believe the San Diego real estate market will finally see home values stabilize in 2012.

I\’m not calling for some slingshot snapback in home values next year. I\’m calling for, to be precise, the continued modest decline in San Diego resale home prices through at least the first half of 2012. Naturally, barring some major detrimental economic news either here or in Europe, I think the second half of 2012 could see some solid base building, with perhaps, some modest single-digit appreciation by year’s end.

There continues to be talk about pent-up buyers to getting into the market. The theory goes that many potential first-time buyers and move up buyers have been holding off getting into the market and once they see some improvement will rush back in a big way. I said this in a number of prior posts, and I\’ll say it again now: I believe there is pent-up demand in today\’s San Diego real estate market! The \’you can never go wrong buying real estate\’ crowd has this pent-up demand theory 180