Real Estate Directory

Conflicting real estate news

Last year homes sold in housrs with multiple offers to purchase. Now — Florida coastline condos, townhomes in Washington, D.C., and Arizona houses — are now languishing on the market.

Home sales have declined 20 percent in Florida, according to the Florida Association of REALTORS®. And in California, homes sales dropped 15 percent. Sales were off by 19 percent in Washington. D.C., and down 25 percent around Phoenix.

Experts blame a number of factors, including a sell-off among investors, worsening affordability due to soaring property prices and rising interest rates. In Florida, last year’s active hurricane season discouraged some buyers.

Despite strong job growth, U.S. home prices remain out of reach for many and that will affect the booming housing market, slowing sales in 2006 by 8 percent, predicts Freddie Mac in the mortgage finance company’s monthly economic outlook.

"The inverse relationship between job growth and affordability is most clearly seen in two regions of the country where job creation has been the highest (the West Coast) and the lowest (the Midwest)," the report says.

West Coast home prices grew 19 percent in the fourth quarter of 2005 from a year earlier, compared with a gain of 6.8 percent in the Midwest, according to the latest data from the Office of Federal Housing Enterprise Oversight.

Freddie Mac predicts average yields on 30-year mortgages to end the year around 6.5 percent, whie NAR says it will be 6.9%.

For 2006 as a whole, the mortgage finance company says it expects a "very healthy" 3.8 percent GDP growth pace. It forecasts consumer prices to rise 2.5 percent in 2006 and the unemployment rate to average 4.8 percent, with the economy adding a total of 2 million to 2.5 million jobs.

While the selling heat drops off across the country, NAR says Home sales should generally level out and remain at historically high levels, according to the NATIONAL ASSOCIATION OF REALTORS®.

David Lereah, NAR’s chief economist, says mortgage interest rates are trending up but will remain favorable. “Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect,” Lereah says. “Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau, meaning this will be the third strongest year on record.”

Existing Home Sales Are Up?

What happened to the Bubble?

The National Association of Realtors reported Thursday that that sales of existing single-family homes and condominiums rose by 5.2 percent in February to a seasonally adjusted annual rate of 6.91 million units. This despite the predicte 5 % drop compared to last year.

The prices of homes sold in February rose to $209,000 for the nationwide median.That was 10.6 percent above the median price in February 2006.   

Economists believe that both new and existing home sales will dip by around 5 percent this year as rising mortgage rates cuts into demand.

But mortgage rates seem to have perhaps stagnated because of a drop in inflation. But Lereah said all indications so far were pointing to a gradual slowdown in sales to a more sustainable pace.

By region of the country, sales rose by 19.2 percent in the Northeast and were up 11.1 percent in the Midwest and 5.1 percent in the West in February. Only the South showed weakness last month with sales there dropping by 2.5 percent from the January pace.

Lereah said sales activity at present was really a "tale of two cities" with some of the hottest markets showing declines while some medium priced markets still posting strong sales gains.

He said that sales were down by double-digit levels in such hot sales markets as Phoenix, Fort Lauderdale and San Diego. He said, by contrast, sales were up by double-digit amounts in aeas such as Indianapolis, Albuquerque and Houston.

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