Homestead mailing list

[Gene GeRue <genegerue AT ruralize.com>]

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/