Skip to Content.
Sympa Menu

homestead - [Homestead] Home sales and prices forecast by NAR

homestead AT lists.ibiblio.org

Subject: Homestead mailing list

List archive

Chronological Thread  
  • From: Gene GeRue <genegerue AT ruralize.com>
  • To: "homestead AT lists.ibiblio.org" <homestead AT lists.ibiblio.org>
  • Subject: [Homestead] Home sales and prices forecast by NAR
  • Date: Sun, 10 Sep 2006 16:11:00 -0500

Rural property sales and prices respond to some of the same economic conditions as urban home sales activity, so the following information is worth knowing if you are planning to buy or sell improved rural property. Unimproved land prices tend to be more stable than for improved properties.

For those planning a city escape, the ideal condition is to sell the city manse for gold and buy rural land for copper. In much of the country this is still possible. Note that this article still predicts 2006 to be the third best on record for existing homes. That 7.6 percent drop in sales hardly qualifies as a bubble popping. More like a decrease in pressure due to a lessening of heat, all that hot air expended on the bubble theme. Again, ho ho, ho hum.

Do not extrapolate these figures to your local market area without due diligence research. Local economic conditions may cause your area to be ahead of or behind the current national trend. In general, those areas that had strong appreciation due to increased immigration and employment will likely continue an upward trend. Areas of former intense speculation unsupported by economic conditions will more likely experience minimal or negative appreciation.


Home Sales Forecast Lowered, Prices to Dip Temporarily - NAR

September 8, 2006­Home sales during the rest of the year will be lower than earlier projections as the market works its way through an inventory and price imbalance, according to the National Association of Realtors (NAR).

David Lereah, NAR's chief economist, said the most obvious effect in the near term will be with home prices. "A year ago we had record home sales and tight supply with buyers bidding over the asking price," he said. "This year sales are slowing, homes are plentiful and sellers are negotiating. Under these conditions, we'll probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory."

"This is a normal pattern during a market correction, but home prices should return to positive territory within a few months and annual appreciation will be slower than historic norms," Lereah said. "Keep in mind that over time, home prices rise at the rate of inflation plus one-to-two percentage points -- buyers in most of the country who plan to stay in their home for a normal period of homeownership can pretty well bank on those historic averages, but people who purchased last year with the intent of flipping are likely to get burned."

The national median existing-home price for all housing types is expected to grow 2.8% this year to $225,900, with the median new-home price rising only 0.2% to $241,400. New-home appreciation is dampened by builders offering incentives to reduce inventory.

Existing-home sales are forecast to fall 7.6% to 6.54 million in 2006, the third best year after consecutive records in 2004 and 2005. New-home sales should to drop 16.1% this year to 1.08 million, the fourth highest on record. Housing starts are projected to decline 9.6% to 1.87 million in 2006.

NAR President Thomas M. Stevens from Vienna, Virginia., said higher interest rates slowed home sales during the first half of the year. "The slowdown occurred mostly in higher cost markets, while other areas continued to expand," said Stevens, senior vice president of NRT Inc. "The shift we've seen lately results from psychological factors with buyers on the sidelines trying to time the market. Both buyers and sellers need to understand what's going on within their local market areas, so it's even more important now to work with a professional who can guide you through current changes and the negotiation process."

The rest of the story is at:
http://www.rismedia.com/index.php/article/articleview/15883/1/1/




Archive powered by MHonArc 2.6.24.

Top of Page