Does anyone have a clue what's going on in real estate today? Yesterday I posted a summary of Doug Duncan's real estate forecast which he presented at the Mortgage Bankers Association 94th Annual Conference. Today, I'm going to summarize what the National Association of REALTORS® forecasts for the next year in the real estate market. The difference in what each "expert" has to say makes me wonder what the definition of expert is! Not being an economist, I know I have no right to cast a judgment, but wouldn't it be easier if everyone agreed?
One disclaimer before the summary. Real estate is local, very local. Sometimes it can vary from neighborhood to neighborhood in the same city. If you want to know what's happening in St. Paul real estate , call a St. Paul real estate agent . . . not one from another state! And remember that these forecasts are based on national predictions, not local ones.
On to the summary from the National Association of REALTORS®, most of which is given by Lawrence Yun, NAR's senior economist:
- Conditions are improving in the mortgage market for consumers which will bring buyers to the market early in 2008.
- The increase in credit availability will help turn around home sales next year.
- Jumbo loan mortgage pricing has steadily improved since the August, 2007, credit crunch.
- Conforming mortgage loans are abundantly available at historically favorable rates.
- FHA loans are replacing conventional sub-prime loans.
- 2007 will be the 5th highest year on record for existing homes sales.
- Speculative sales have been removed from the market and home sales are returning to healthy levels while prices remain near record highs, the result of good mortgage rates and job gains.
- 2006 existing homes sales were 6.48 million. 2007 sales are expected to be 5.78 million. 2008 sales are expected to be 6.12 million.
- New homes sales in 2006 were 1.05 million. Sales are expected to be 804,000 this year and 752,000 in 2008.
- New home sales will recover in spring of 2008.
- The cut back in new home starts lowers the real estate inventory and stabilizes home prices.
- New home starts which include multi-family homes were 1.8 million in 2006; are expected to be 1.37 million in 2007; and 1.24 million in 2008.
- The median price for existing homes will slip 1.3% to $219,000 in 2007, but rise 1.3% in 2008 to $221,800. New home median prices will decrease 2.1% to $241,400 this year and increase 1% in 2008 to $243.900.
Comparing the two experts' predictions makes me think Doug Duncan sees the glass as half empty and Lawrence Yun thinks the glass is full!