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."