Sunday, September 10, 2006

Lereah: "Home prices should return to positive territory within a few months"

Home 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®.

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.”

NAR Septmeber 2005 Forecast


At 1:07 PM, Blogger xSparta said...

That's what they said about ENRON stock. He shoud be in jail with the rest of the ENRON crooks.

At 9:53 AM, Anonymous Highest CD Rates said...

I have noticed one thing that the home prices we almost equal in 2006 when compared to 2009. I could not discuss about the causes of decrease in home prices in 2006 but certainly the decrease in 2009 home prices are mainly due to global recession.


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