“We now have the most favorable market for home buyers in several years,” that is the word from David Lereah, chief economist of the National Association of Realtors. This is probably the most honest thing he has said in a while. Lereah is in the hard position of carrying a trade associations water during a downturn, as some of my less sophisticated (or more?) friends would say, “putting lipstick on a pig”.
However, for most of the country, the speculators are out and the inventory that was created to feed them is being absorbed. New housing starts for 2007 are expected to fall 12 percent as the builders re-align and reposition themselves. Existing home sales are to remain essentially flat.
Considering all of the speculatory volume that was happening during the 2003–2005 window, this is not that bad of news. Housing prices will stabilize allowing salaries to catch up, builders will refocus and create inventory that is targeted correctly to the marketplace, and the glut of real estate agents will diminish.
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Thank you sir! It heartens me when you say "This is probably the most honest thing he has said in a while." But I do not think it is “putting lipstick on a pig.†The market is still very strong and some sectors like existing homes will be flat at worst for a very brief period of time… like a few weeks at most. Then it is back to the $$$!!! So hang on for the ride to keep going!!!!
Tom, everything you say about the housing markets at Real Estate Bloggers mirrors the way I've been thinking… in some of the most expensive areas in California (Palo Alto, SF), we're seeing some upturns… it may be related to an end of year selling "blitz" when motivated sellers see November as a last chance opportunity to find the buyer before the holidays.
Tom, I agree with you though I am skeptical of Mr. Lereah's very upbeat predictions about the near future. A sideways trend for median prices like we saw in the 90's (median prices went sideways throughout most of the mid-90's) is probably more realistic. I definitely agree with you though, especially with rates and prices down, that this is a great time to buy. While the "glut of real estate agents will diminish, I hope we see an increase in accountability and oversite of the real estate agents and brokers still left standing.