Home sales, overall, picked up in November, but resuming the undulating, sine wave-like motion of the past four years, the real estate market took another related dip in December 2011. Sales of new homes took a particularly significant dive – the first in four months. As explained by Business Week, figures went down 2.2 percent for single-family properties.

2011 was reportedly the worst year for builders since 1963, but economists seem to think that demand will increase in 2012. On one hand, the average price per home is still plummeting; even with low mortgage rates, the market for existing and new properties is not appealing to buyers. Why, when no bottom is in sight, purchase a home, only to end up with an underwater mortgage a year later? The instability of the economy additionally contributes to the general apprehension surrounding home-buying.

Anika Khan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, quoted in the Business Week piece, explains the conditions more clearly:

“Builders continue to contend with a number of existing homes that are deeply discounted. We’re expecting a bit of a pickup in 2012, but we won’t see a meaningful increase as long as new homes are competing with those existing homes.”

So, with an apparent lack of demand, why should builders expect the market to go up, especially when a deluge of foreclosures is predicted for later in the year? Because fewer existing homes are for sale on the market, the demand for new properties may grow.

The constant flip-flopping of residential real estate does not indicate a clear path for 2012. While prices and sales of new homes continue to drop, figures for home sales overall increased in November 2011. Yet, more foreclosures are expected to come at any moment, and areas with particularly great price decreases over a 10-year period, such as Las Vegas, don’t seem to be improving. With some facets up and others down, where do you think real estate will go in 2012?

How many of you would purchase a former foreclosure fixed up by a 1990s hip-hop star? Dubious-quality songs, however, don’t become questionable real estate practices. Vanilla Ice, the rapper born Rob van Winkle, has transformed himself from a washed-up performer, one that appeared just a few years ago on Hit Me, Baby, One More Time, into a successful house-flipper with a reality television show on the DIY Network. A renovation show in the same vein as Extreme Makeover: Home Edition, The Vanilla Ice Project features Van Winkle and his team transforming a poor-quality foreclosure into a luxury home and then flipping it for a profit.

As one example of his show’s approach, Van Winkle described the new features added to a foreclosure in a Vulture interview:

“I built a lazy river in the backyard and put this tiki hut in the middle of it like an island. On the inside, I put in a pneumatic elevator; a panoramic, 200-inch 3-D gaming system room with vibrating chairs; and a cinema that looked like an auditorium out of a castle. Flush-mount iPads throughout the entire house in every room, because the house is a smart house, which means that with your smartphone anywhere in the world […].”

Like any reputable real estate professional, Van Winkle offers an investing course, albeit one that’s online. House-flipping, however, adjusts with the market conditions, and those taking his course – or any course on it, for that matter – must have reasonable expectations. A property likely cannot be fixed up to the level of a Vanilla Ice Project foreclosure, and it won’t reap in as large of profits as pre-crash flipped homes did. In fact, excessive house-flipping influenced the crash in some markets.

Rather, sales from house-flipping for the ordinary individual – and not a former rap star in his second career stage – may take months, and while a profit is earned, the amount isn’t a huge payday.

Online listings give a far fuller picture of a property than print advertisements ever could. Recall the semi-focused, black and white photos in the newspaper of yesteryear? These days, an online real estate listing gives multiple views of the outside and grounds and interior of a house or apartment. As a result, real estate photographers resort to strategies to make a property appear extra attractive in order to reel in potential buyers.

Profiled in the Wall Street Journal, David Paler is one such real estate photographer. Operating in the New York City area, Paler photographed 10,000 properties over his entire career, doing approximately three per day. Because photographs can significantly help out an agent, he considers a real estate listing akin to a dating profile – honesty is the best policy, but a few improvements can draw in more interest. About photographing difficult properties, he said:

“The majority of the time, you’re going into apartments that weren’t designed to be photographed. And you have to make them look really appealing, which is a skill.”

Much like fashion photography, attractive pictures of real estate depend on light, furniture and décor, and a bit of image-editing software. Natural and artificial lights, claims Paler, are both used and a few well-placed pieces of décor and furniture alter a space’s look. The camera’s angle is also necessary, but in some cases, this can make a room appear larger than it actually is. Software, additionally, won’t totally change a space’s appearance, unlike in fashion; it helps, however, in color correction, sharpening images, and taking out blemishes, such as scuffs. He went on to explain:

“It’s a tricky business because we have to shoot what’s there. [The property] can be utterly stunning or just awful and we have to really make the best of it.”

What’s the state of the real estate market at the start of the new year? Based on figures from November 2011, the consensus is, sales and average price aren’t as bad as they could be. Sales, more specifically, rose four percent from October to November and are a second month of gains. The National Association of Realtors reported in December that only 2.58 million unsold homes are still on the market – the lowest since February 2007. Additionally, the overall sales price increased 2.1 percent from October but is 3.5 percent lower than a year ago. About the slight hint of improvement, Eric Green, a Chief Economist for TD Securities said:

“We are seeing tentative signs of life in housing in terms prices and construction. The housing market is finding its bottom, and that will translate into more growth in GDP and less of a drag on consumer confidence.

“But we still have a long, long way to go. We could see some contractions here and there. The concerns are how much of this would translate into forward momentum into 2012.”

On the other hand, the gains might actually be greater than originally thought. At the same time this news was released, the National Association of Realtors also revealed that they overstated sales from 2007 through 2010 by roughly 14 percent: Homes sales per month were, in fact, 4.42 million on average, rather than the reported 5.16 million.

On the other hand, a flood of foreclosures and short sales is imminent, by predictions for 2012. The same information was predicted for 2011 (remember more foreclosures were predicted for 2011?), so 2012 may just be another reiteration that we’ll all hear for the next few years until the economy and real estate market are both stable.

What do you think of this slightly-positive news? Could the real estate market be gradually recovering, or are the improvements just another small hill that will dip down soon enough?