Thursday, April 12, 2007
Realtors Predict Prices Will Fall
National decline would be first in record-keeping era - By David Armstrong, San Francisco Chronicle Staff Writer.
"Saying that the housing bubble has truly burst, the National Association of Realtors predicted Wednesday that the median price of existing U.S. homes is expected to fall 0.7 percent this year, the first time that has happened since records started in the late 1960s."
"The forecast was startling, coming from the normally upbeat industry group. Last year, in a sign of the start of the slowdown, the nationwide median price of an existing home rose a modest 1 percent."
"The California Association of Realtors predicted in October that statewide median prices would fall by 2 percent in 2007."
"Economy.com analyst Mark Zandi called for an even sharper statewide drop of 6 percent."
California's struggling housing market is weakening as lenders tighten underwriting standards. "Mounting foreclosures will also be a weight on housing prices as these properties are dumped into the already fragile market at a significant discount," Zandi said in an e-mail. "This outlook assumes that interest rates remain stable and that the job market outside of housing remains stable.''
"The National Association of Realtors has also lowered its 2007 forecast for sales of new and existing homes. Tighter lending standards and the continued fallout from the subprime mortgage meltdown are to blame, said association spokesman Walter Molony."
"The national median new home sale price is expected to rise 0.4 percent this year, after a 1.8 percent gain in 2006, the association said."
"However, these figures, even revised downward, are still overly optimistic, said Ken Rosen, director of the Fisher Center for Real Estate at UC Berkeley."
Rosen expects a drop of 2 to 3 percent nationally, and as much as 5 to 15 percent in some markets. "The Bay Area will do better because it is one of the top five markets in the country. It has a small inventory and good job creation,'' he said.
"In Rosen's view, home prices could appreciate from 1 to 3 percent in the Bay Area this year."
"Despite the unsettled quality of the current housing market, this, too, shall pass, housing industry experts said."
"We still view this as a cycle playing itself out,'' DataQuick's LePage said.
"Saying that the housing bubble has truly burst, the National Association of Realtors predicted Wednesday that the median price of existing U.S. homes is expected to fall 0.7 percent this year, the first time that has happened since records started in the late 1960s."
"The forecast was startling, coming from the normally upbeat industry group. Last year, in a sign of the start of the slowdown, the nationwide median price of an existing home rose a modest 1 percent."
"The California Association of Realtors predicted in October that statewide median prices would fall by 2 percent in 2007."
"Economy.com analyst Mark Zandi called for an even sharper statewide drop of 6 percent."
California's struggling housing market is weakening as lenders tighten underwriting standards. "Mounting foreclosures will also be a weight on housing prices as these properties are dumped into the already fragile market at a significant discount," Zandi said in an e-mail. "This outlook assumes that interest rates remain stable and that the job market outside of housing remains stable.''
"The National Association of Realtors has also lowered its 2007 forecast for sales of new and existing homes. Tighter lending standards and the continued fallout from the subprime mortgage meltdown are to blame, said association spokesman Walter Molony."
"The national median new home sale price is expected to rise 0.4 percent this year, after a 1.8 percent gain in 2006, the association said."
"However, these figures, even revised downward, are still overly optimistic, said Ken Rosen, director of the Fisher Center for Real Estate at UC Berkeley."
Rosen expects a drop of 2 to 3 percent nationally, and as much as 5 to 15 percent in some markets. "The Bay Area will do better because it is one of the top five markets in the country. It has a small inventory and good job creation,'' he said.
"In Rosen's view, home prices could appreciate from 1 to 3 percent in the Bay Area this year."
"Despite the unsettled quality of the current housing market, this, too, shall pass, housing industry experts said."
"We still view this as a cycle playing itself out,'' DataQuick's LePage said.
Labels: Bay Area Real Estate, CAR, DataQuick, Fisher Center for Real Estate, Real Estate Cycles, San Francisco Chronicle
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