Realty Times - "Why NAR Expects Home Sales To Lift From Temporary Dip" (9-11-06)

"That's significant because housing has never receded on a national scale since the NAR began keeping records back in 1968. However, let's have a little perspective. There's also not been a period of double-digit appreciation on a national scale lasting a record five years, either. In that case, some pullback in prices should be expected as buyers realize they no longer have to compete at the top of their respective markets."

“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.”

"California will take the longest to correct. It could be another 12 months. Southern Florida could be another 12 months -- but I doubt it. If sellers reduce prices, sales will come back. This is not a contraction due to a poor economy and lost jobs. Households and investors have the financial wherewithal to purchase property- but they have lost confidence and need prices to correct to come back into the market. Inventories will begin to decline by the end of the year and sales will flatten out."