2006-09-17 04:58:20 · 18 answers · asked by Nick Green 1 in Business & Finance ➔ Renting & Real Estate
WASHINGTON (Reuters) -- Home sales will be a good deal weaker this year than earlier thought as potential buyers remain on the sidelines waiting for better deals, a national real estate group said Thursday.
The National Association of Realtors (NAR) said sales of existing homes were likely to drop 7.6 percent this year to 6.54 million. A month ago, the group thought existing homes sales would fall only 6.5 percent to 6.61 million.
The association, which said housing prices were likely to dip temporarily below year-ago levels, also revised and lowered its forecasts for new homes sales and housing starts. It said new homes sales looked set to drop a steep 16.1 percent to 1.08 million units, compared to a previous forecast of a fall to just 1.12 million.
NAR said builders were now likely to break ground on just 1.87 million units this year - 9.6 percent lower than last year's level and a bit below its prior 1.88 million forecast.
"This year sales are slowing, homes are plentiful and sellers are negotiating," NAR chief economist David Lereah said in a statement. "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," he added.
NAR said the median price for existing homes - the price at which half of homes sell for more and the other half for less - should grow 2.8 percent this year to $225,900.
But it said the median price of new homes would likely inch up just 0.2 percent to $241,400.
"The shift we've seen lately results from psychological factors with buyers on the sidelines trying to time the market," NAR President Thomas Stevens said in explaining the sharp shift in the group's forecast.
2006-09-17 05:41:21 · answer #1 · answered by BrokenRomeo 5 · 0⤊ 0⤋
That's way to general a question. In some parts of the counrty, they have peaked and even started to retreat. In other parts of the country they show no sign of letting up any time soon.
For example, in the Northeast, some areas have flattened or sagged in the past several months.
On the other hand, the Fayetteville - Bentonville - Rogers area of Northwest Arkansas, probably the fastest growing metro area in the country, shows no sign of any letup in property values. Retail, residential, industrial and commercial construction is exploding and many developments are pre-sold very shortly after ground-breaking. Existing home values have doubled in just a few years.
2006-09-17 12:14:19 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Not really. They may level off for a period in which buyers get a slight upper hand. But don't expect mircles.
For the sake of easy math .... say you have a mortgage of $700,000. You want to sell your home, but will need to pay the bank off that $700,000. Even thought house prices have stalled in your neighborhood there is no way you can sell that home for less then $700,000 or you will risk not paying the bank back on their loan (which the bank wouldn't even allow, else you are looking a foreclosure sale).
Sales will slow, but the people who are expecting a return to prices from the early 90's are mistaken. After a leveling off period of 5 to 10 years the prices will again climb and sales will start again. It's a cycle, and past history supports it. At least for San Diego that's been the case.
2006-09-17 12:11:27 · answer #3 · answered by zombie_togo 3 · 0⤊ 1⤋
Got a small downward rebound here in Phoenix, after +55% growth last year #1 in the country (more than even Vegas).
I'm holding on to my home until Q1 of 2007 at the earliest. Moving out of the city to a rural location that has more stable prices.
2006-09-17 12:15:07 · answer #4 · answered by dryheatdave 6 · 0⤊ 0⤋
personally, i think so. people can only be squeezed so much before something has to give. on the clark howard show, he says that defaulting on loans and foreclosures is up like 50%.
my guess is that's because of interest only loans, where your balance ends up going up instead of down as you make your payments, or a.r.m.s(adjustable rate mortgages) going up, and people just can't afford the payments.
we refinanced last september, i've been paying extra on the loan, and currently am a little over 10yrs into the loan. plan to have my fixed rate 30yr loan paid off with the next 5 yrs. only way to do it, otherwise you pay 3+times what the asking price was. that's stupid.
2006-09-17 12:23:30 · answer #5 · answered by NeverReady 3 · 0⤊ 0⤋
Property Prices is always what a buyer will give and what a seller is willing to take... In some cases prices go up and down due to demand and wacky media tactics.
2006-09-17 12:19:51 · answer #6 · answered by Scott 6 · 0⤊ 0⤋
No - they're just flattening out in some areas as an adjustment period. After a while, real estate prices will rise again. They always do!
(They're making more people, but they're not making more land!, as the old joke goes, but it's true and it does explain why real estate will always go up eventually.)
2006-09-17 12:00:13 · answer #7 · answered by I ♥ AUG 6 · 0⤊ 1⤋
No,but everything is going to peak when the troops come home
2006-09-17 11:59:59 · answer #8 · answered by aries4272 4 · 0⤊ 0⤋
Yes and NO
some area are seeing a decline in prices, while others are seeing an increase
Want foreclosures ? anywhere
http://www.theforeclosuresinfo.com/bay-area-real-estate-home-search.php
2006-09-17 14:10:08 · answer #9 · answered by Anonymous · 0⤊ 0⤋
Not if you live in London and the surrounding areas
2006-09-17 12:31:31 · answer #10 · answered by Denny 3 · 0⤊ 0⤋