Thursday, September 07, 2006

NAR - "Home Sales Forecast Lowered, Prices To Dip Temporarily" (9-7-06)

"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®."

“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.”

Existing-home sales are forecast to fall 7.6 percent this year to 6.54 million, while new-home sales are forecast to drop 16.1 percent to 1.08 million compared to the previous year. In the NAR's new release in August, existing-home sales were expected to fall 6.5 percent this year while new-home sales were projected to fall 12.8 percent.

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