Realtors See Improvement Ahead
For Housing Market, Home Prices
By BENTON IVES-HALPERIN
December 11, 2006
WASHINGTON -- Prospects for existing home sales may improve in the coming year, relative to this year's sluggish pace, while new home sales are expected to continue their slide into 2007, according to the National Association of Realtors Monday.
Nonetheless, NAR said home prices will continue to appreciate this year, even as market activity slows dramatically. The national median existing-home price for all of 2006 is projected to rise 1.4% to $222,600, with another 1.0% gain next year to $224,700, according to NAR. The median new-home price should fall by 0.5% to $239,700 this year, followed by a slight 0.8% increase in 2007 to $241,700.
Based on NAR forecasts, existing-home sales are expected to be 6.47 million for all of 2006, which would be a decline of 8.6% from 2005. In 2007, the pace of sales is expected to rise steadily from the current low and reach an annual total of 6.40 million, which would be 1.0% lower than this year's total.
"By the fourth quarter of 2007, existing-home sales will be 4.6% higher than the current quarter," said David Lereah, NAR's chief economist, in a statement accompanying the forecast.
New home sales, on the other hand, are projected to remain fairly depressed into next year. NAR expects new-home sales in 2006 to fall 17.7% to 1.06 million, before dropping an additional 9.4% in 2007 to 957,000.
NAR attributed much of the contraction in the market for new homes to builders pulling back on construction to support pricing for current inventories, while high construction costs in some areas are eating into profits.
Still, "most of the correction in home prices is behind us, but general gains in value next year will be modest by historical standards," Mr. Lereah said. NAR said total housing starts for 2006 are likely to fall 12.3% to 1.82 million units, followed by another 15.1% plunge in 2007 to 1.54 million.
"This correction is one of the factors drawing buyers into the current market, but most sellers are still seeing very healthy long-term gains," said Mr. Lereah.
For Housing Market, Home Prices
By BENTON IVES-HALPERIN
December 11, 2006
WASHINGTON -- Prospects for existing home sales may improve in the coming year, relative to this year's sluggish pace, while new home sales are expected to continue their slide into 2007, according to the National Association of Realtors Monday.
Nonetheless, NAR said home prices will continue to appreciate this year, even as market activity slows dramatically. The national median existing-home price for all of 2006 is projected to rise 1.4% to $222,600, with another 1.0% gain next year to $224,700, according to NAR. The median new-home price should fall by 0.5% to $239,700 this year, followed by a slight 0.8% increase in 2007 to $241,700.
Based on NAR forecasts, existing-home sales are expected to be 6.47 million for all of 2006, which would be a decline of 8.6% from 2005. In 2007, the pace of sales is expected to rise steadily from the current low and reach an annual total of 6.40 million, which would be 1.0% lower than this year's total.
"By the fourth quarter of 2007, existing-home sales will be 4.6% higher than the current quarter," said David Lereah, NAR's chief economist, in a statement accompanying the forecast.
New home sales, on the other hand, are projected to remain fairly depressed into next year. NAR expects new-home sales in 2006 to fall 17.7% to 1.06 million, before dropping an additional 9.4% in 2007 to 957,000.
NAR attributed much of the contraction in the market for new homes to builders pulling back on construction to support pricing for current inventories, while high construction costs in some areas are eating into profits.
Still, "most of the correction in home prices is behind us, but general gains in value next year will be modest by historical standards," Mr. Lereah said. NAR said total housing starts for 2006 are likely to fall 12.3% to 1.82 million units, followed by another 15.1% plunge in 2007 to 1.54 million.
"This correction is one of the factors drawing buyers into the current market, but most sellers are still seeing very healthy long-term gains," said Mr. Lereah.
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