Market should improve in 2008

Lawrence Yun, NAR senior economist, notes that widening credit availability will help turn around home sales. "Conforming loans are abundantly available at historically favorable mortgage rates. Pricing has steadily improved on jumbo mortgages since the August credit crunch, and FHA loans are replacing subprime mortgages," he said.

Yun said it's important to place the current housing market in perspective, and that 2007 will be the fifth highest year on record for existing-home sales. "Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year - a lot of people are, in fact, buying homes," he said. "One out of 16 American households is buying a home this year. The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains."

He emphasized all real estate is local with naturally large variations within a given area.

"Markets like Austin, Salt Lake City and Raleigh have been outperforming recently and will continue to do well next year," Yun said. "Other areas like Denver and Wichita will likely move up in the price growth rankings due to very positive local economic developments."

Existing-home sales are expected to total 5.78 million in 2007 and then rise to 6.12 million next year, in contrast with 6.48 million in 2006. New-home sales are forecast at 804,000 this year and 752,000 in 2008, down from 1.05 million in 2006; a recovery for new homes will be delayed until next spring.

"A cutback in housing construction is a positive sign for the market because it will help lower inventory and firm up home prices," Yun said. Housing starts, including multifamily units, are likely to total 1.37 million in 2007 and 1.24 million next year, down from 1.80 million in 2006.

NAR President Pat V. Combs, from Grand Rapids, Michigan, and vice president of Coldwell Banker-AJS-Schmidt, said, "Housing is still a good long-term investment, and we'll be seeing a broad, modest improvement in home prices in 2008. With widely varying conditions, the best advice for consumers is to consult a Realtor(R) in their area to learn about local market conditions because supply and demand can change from one neighborhood to the next."

Existing-home prices will probably slip 1.3% to a median of $219,000 in 2007 before rising 1.3% next year to $221,800. The median new-home price should drop 2.1% to $241,400 this year, and then increase 1.0% in 2008 to $243,900.

The 30-year fixed-rate mortgage is expected to average 6.4% for the next two quarters and then edge up to the 6.6% range in the second half 2008. Additional cuts expected in the Fed funds rate will help to keep mortgage interest rates historically favorable.

Growth in the U.S. gross domestic product (GDP) is estimated at 2.0% this year, below the 2.9% growth rate in 2006; GDP is likely to grow 2.7% next year.

The unemployment rate is forecast to average 4.6% this year, unchanged from 2006. Inflation, as measured by the Consumer Price Index, is expected to be 2.8% in 2007, compared with 3.2% last year. Inflation-adjusted disposable personal income will probably increase 3.6% in 2007, up from 3.1% last year.

3:02 PM - Nov. 8, 2007 - comments {4} - post comment

RE: Market should improve in 2008

Wish full thinking!
The cycle last 7 years if the top was in June 2005 the bottom is around 2012. I think we have a ways to go.
There are not many that have 60K plus for a down payment  therefore closing them off from the lending market.
Sellers are still unwilling to lower their  home prices  and need a reality check.  I am afraid all this is going to take some time to work itself out.
In the mean we  can  all build up are base of potential clients so that when the market turns we can and will take full advantage of it! Good Luck to all!

Danny Bruno - 3:23 PM - Nov. 8, 2007

---

RE: Market should improve in 2008

Hi Danny,

Don't know where you're located but here in Denver we've been down since 9/11 so our 7 year cycle is about up.  We're seeing very positive signs in terms of days on the market and sold prices are starting to move up a little.  Of course, this time of year things always slow down but we're looking forward to a great spring selling season.

Andi

Andi Durbin - 4:06 PM - Nov. 8, 2007

---

RE: Market should improve in 2008

We have been looking in Raleigh and the prices are actually coming down quite a bit. So much for the NARs numbers.

 

NC Buyer - 11:34 AM - Jan. 24, 2008

---

RE: Market should improve in 2008

Remember that all real estate is local - maybe even down to the block!

Here in Denver it looks like our market is starting to steady.  Sales here are actually up and average prices are up very slightly.

Raleigh may be very, very different.

Andi

Andi Durbin - 1:57 PM - Jan. 24, 2008

---

Write a Comment
Your Name:	RealTown Members: Click here to login
Your E-Mail:
Your Website:
Subject:
Your Comment:
Notifications:	Notify me by email when new comments have been posted to this entry.
Privacy:	Private Comment - Do not publish this comment to the public.
Verification:	To verify that you are a human and not a script, please enter the verification word from the image into the box on the right.

RSS Blog Feed

Categories

Favorite Links

Favorite Blogs