Price Declines Slowing According to NAR Report
Posted: Aug 20, 2007
With all the negative news on housing and Wall Street lately, one would expect the sky to be falling. Not so. Although home prices continue to slip lower, the amount of the decline is very small on a national average basis.
Here are the highlights of the National Association of Realtor’s (NAR) national housing data over the past 12 months (year ending June 30, 2007):
- Median price of a single-family home slipped 1.5%
- Median price of a condominium rose 1.0 percent
- Overall prices have declined 1.7% from their peak in the 3rd quarter 2005
- 97 of 149 major metro areas appreciated in past 12 months
- Home prices are relatively flat since bottoming out in 4th quarter of 2006
- Recent mortgage disruptions will hold back sales temporarily
- Prices expected to turn positive in spring 2008, with 2% gain on the year
- Prices expected to increase further in 2009
- Number of home sales fell more than home prices – down 10.8%
- National home sales at 5.91 million vs 6.63 million one year ago
- Current inventory level shows an 8 month supply of housing
Overall the news can be viewed as positive, since it now appears that the worst may be over with respect to price declines. The turnaround is showing some signs of materializing.
Outlook
From an investment standpoint, keep an eye on the foreclosure market, as it could slow the rebound. To offset this, watch the FED as they make a move soon to lower interest rates that will benefit you and I – the consumer.
The small .5% reduction in the FED Discount Window that took effect Friday (Aug 17th) was a positive sign that they are beginning to get the picture. Today’s cut basically kept the banks and a number of lenders in business. The real need sits with the consumer. Watch for FED cuts in the Discount and Prime Rates soon, at which time we will begin to see a notable turn in the real estate market.
Now is the time to buy – if you can. Yes… if you can. Lending guidelines are much tighter at the moment. If you can secure financing for real estate investing, don’t miss the best buying opportunity we will see in a long while.
