| The National Market
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| | to move inventory. Inventories rising
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| The latest report on third-quarter home
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| | Supplies of new homes are way up, to
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| prices, released in November by the
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| | nearly 500,000 units, from 350,000 a few
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| National Association of Realtors, showed
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| | months ago. "That's an all-time high for
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| continued strength. But increasingly
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| | new homes," says DeKaser. The higher the
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| there are signs that prices have reached
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| | inventory, the more likely prices will
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| a plateau. Of 147 markets tracked, 69 had
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| | fall. Sell times are up Houses are
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| gains from a year ago of more than 10
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| | sitting on the market longer. New homes
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| percent -- only six metro areas
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| | now take about 4.1 months to sell and
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| experienced declines. But from the second
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| | existing homes 4.7; both figures are up
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| quarter to the third quarter, the
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| | substantially.
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| national median home price rose to
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| | What to expectIn a recent survey, NAR
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| $215,900, up just 3.8 percent. That
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| | members say they predict home prices to
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| contrasts with a 10.4 percent jump in the
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| | rise only 5 percent in the next 12
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| prior quarter. And more and more leading
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| | months. Nearly half of the realtors
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| indicators are pointing to a slowdown. In
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| | predict prices will rise less than five
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| Boston, real-estate investor Matthew
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| | percent and 6.4 percent actually expect
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| Martinez reports recently having spoken
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| | prices to fall. "You can't expect
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| to five condo converters. "They all said
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| | double-digit price increases to go on
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| the party was over," Martinez said.In
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| | forever," said Walter Molony, spokesman
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| Florida, Elena Filipa, vice president of
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| | for NAR. "We're seeing a market in
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| the Corcoron Group in West Palm, said
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| | transition in which there'll be an easing
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| "We've leveled off. I would say prices
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| | of price increases in the future." While
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| will go up this year, but not as fast as
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| | DeKaser expects a slowdown, he predicts
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| they have." None of this surprises the
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| | an "orderly transition" for the most
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| many economists who have been waiting for
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| | part, with some exceptions. "There will
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| a downturn. Richard DeKaser, chief
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| | be busts in some markets," he said.
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| economist for mortgage banker National
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| | "Mostly, we'll come out of it unscathed."
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| City, has been reluctant to call the top,
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| | For the most part, DeKaser doesn't
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| but thinks it has finally passed.
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| | envision losses on that scale. He thinks
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| "We're coming down the other side of the
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| | home prices will decline 1.7 percent
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| mountain," said DeKaser.
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| | during the fourth quarter of 2005 and
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| The signs include: Builder pessimism The
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| | stay almost flat all the way through
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| builders DeKaser surveys are less
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| | 2007. But history shows that some
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| optimistic than they were even a few
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| | over-valued markets could fare much
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| months ago. Separately, one leading
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| | worse.
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| builder, Pennsylvania-based Toll
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| | Molony points out that the most severe
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| Brothers, announced last week that
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| | drops in real-estate prices are usually
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| expected demand for 2006 would be down,
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| | triggered by an underlying economic
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| resulting in moderating price increases
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| | crisis. After oil prices went into a
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| and fewer sales. New-home sales declining
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| | six-year decline in the late 1970s,
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| DeKaser also notes that the number of new
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| | housing prices in oil cities experienced
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| homes sold have fallen sharply since
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| | steep drops. In Oklahoma City, prices
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| peaking in July at an annual rate of 1.3
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| | plummeted 26 percent in real dollars from
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| million units. DeKaser calls new-home
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| | 1983 to 1988. With inflation, the "real"
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| sales (rather than existing-home sales)
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| | loss was more than 40 percent. Houses in
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| the canary in the coal mine. "Developers
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| | many oil patch cities are worth less in
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| tend to be more sensitive to market
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| | real dollars than they cost more than 20
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| conditions," he said. They have cash flow
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| | years ago.Written for
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| issues, payrolls, and loans that put more
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| | By James Christensen
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| pressure on them to sell. Ordinary home
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| | Real Estate Expert and educator. Our
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| sellers are often more selective than
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| | training site offers a valuable service
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| developers, even taking properties off
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| | to individuals looking to get into the
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| the market if they don't get the price
| |
| | Real Estate industry.
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| they want. Developers have to drop prices
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