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Realtors' Forecast Bucks Common Wisdom
AP Business ^ | Monday December 10, 10:42 am ET | Alan Zibel,

Posted on 12/10/2007 7:58:15 AM PST by BenLurkin

WASHINGTON (AP) -- Bucking conventional wisdom, a trade group for real estate agents on Monday said the battered housing market is on the verge of stabilizing and inched up its outlook for 2007 and 2008 home sales.

The revised monthly forecast from the National Association of Realtors, which followed nine straight months of downward revisions, calls for U.S. existing home sales to fall 12.5 percent this year to 5.67 million -- the lowest level since 2002. Last month, the association predicted 5.66 million existing homes would be sold this year.

The Realtors' group also forecast sales will rise slightly in 2008 to 5.7 million, up from last month's prediction of 5.69 million.

Numerous other economists, however, are far less optimistic than the trade group. They predict weak sales and falling prices through next year and beyond and emphasize that those problems could worsen if the economy sinks into a recession.

Mark Zandi, chief economist at Moody's Economy.com, predicted at a housing forum last week that, if the economy slips into recession or if efforts to prevent foreclosures don't pick up substantially, the housing market downturn could last through the end of the decade.

The trade group's chief economist, Lawrence Yun, cited job growth and the replacement of subprime lenders to borrowers with weak credit with government-backed loans as reasons for the improved outlook.

"Despite over-exaggerated negative coverage on the housing conditions, many local markets are actually seeing price increases," Yun said at a press briefing. "Mortgage availability is improving"

The trade group also said its index that forecasts near-term home sales inched upward in October. The trade group's seasonally adjusted index of pending sales for existing homes rose 0.6 percent to 87.2 from an upwardly revised September index of 86.7, but was down 18.4 percent from a year ago -- the third-largest year-over year decline on record.

The Realtors group also said the median price for U.S. existing homes -- the point at which half sold for more and half for less -- will sink by 1.9 percent to $217,600 this year and rise 0.3 percent next year to $218,300.

If median prices fall this year, it will be the first price decline in the nearly 40 years that the trade group has tracked that data.

Other ways to measure national housing prices, such as the S&P/Case-Shiller index, have already shown price declines.

A government index of national home prices in the fourth quarter marked a quarterly decline for the first time in 13 years in the third quarter.

Home prices dipped 0.4 percent nationwide in the July-September period, compared with the previous quarter, the Office of Federal Housing Enterprise Oversight said last month, citing weakening prices in much of the country.

Compared with the third quarter of 2006, U.S home prices posted an increase of 1.8 percent, but it was the smallest year-over-year increase since 1995, according to the agency, which oversees the big mortgage-finance companies Fannie Mae and Freddie Mac.


TOPICS: Business/Economy
KEYWORDS:
Whose "common wisdom"?
1 posted on 12/10/2007 7:58:16 AM PST by BenLurkin
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To: BenLurkin

“housing market is on the verge of stabilizing “

Yes it’s going on right now. Hasn’t made the news yet and it could be a false start.
But we are seeing on the front lines.


2 posted on 12/10/2007 8:00:13 AM PST by HereInTheHeartland ("We have to drain the swamp" George Bush, September 2001)
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To: BenLurkin

Not a chance in hell...


3 posted on 12/10/2007 8:02:43 AM PST by 2banana (My common ground with terrorists - they want to die for islam and we want to kill them)
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To: BenLurkin
The trade group also said its index that forecasts near-term home sales inched upward in October. The trade group's seasonally adjusted index of pending sales for existing homes rose 0.6 percent to 87.2 from an upwardly revised September index of 86.7,

This indicator is up for two months in a row.

4 posted on 12/10/2007 8:18:58 AM PST by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: BenLurkin

send the Blue Helmets in!!!!


5 posted on 12/10/2007 8:21:37 AM PST by Ancient Drive
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To: BenLurkin

sorry wrong thread.


6 posted on 12/10/2007 8:22:06 AM PST by Ancient Drive
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To: BenLurkin
Realtors make money from selling houses. They make more money from selling expensive houses quickly and repeatedly. I put a Realtor's report on housing prices stablizing (so buy, buy, buy now!) in the same file as I do the radio gold bugs who are trying to sell me their nice shiny metal because prices are sure to go up.

The grain of salt I need for this is about the size of Lot's wife.

7 posted on 12/10/2007 8:51:00 AM PST by KarlInOhio (Government is the hired help - not the boss. When politicians forget that they must be fired.)
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To: HereInTheHeartland

I am in the Washington DC area. Local prices were up 2% in the close-in communities but down 4% in the outlying areas. Proximity to Metro and other commuter access was important in determining price. Four percent is not chickenfeed but it’s a lot better than the 50% some “experts” were predicting.


8 posted on 12/10/2007 8:51:39 AM PST by Fairview ( Everybody is somebody else's weirdo.)
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To: HereInTheHeartland

The dollar drop is making U.S. investments cheap for foreigners. Either directly or indirectly this will increase the demand for real estate. So yes I expect the prices to stabilize and start up next year.


9 posted on 12/10/2007 9:08:38 AM PST by live+let_live
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To: live+let_live

Where are the folks going to get the financing for all these home contracts? 20% down...good credit...good income....


10 posted on 12/10/2007 9:18:28 AM PST by dakine
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To: BenLurkin

History has shown that real estate prices increase over time and that will be the case this time around.

Now is a great time to buy.


11 posted on 12/10/2007 9:23:57 AM PST by Loyal Buckeye
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To: BenLurkin

stabalizing...hahahahaa


12 posted on 12/10/2007 9:50:36 AM PST by BurbankKarl
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To: BenLurkin

Sounds like someone is getting well paid to induce Stockholm syndrome in the remaining surviving population of real estate industry professionals in the country.


13 posted on 12/10/2007 9:58:07 AM PST by JerseyHighlander
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To: BenLurkin

When is the last time anyone heard a Realtor quoted in the press saying that “The market sucks, you’d be crazy to sell now”?


14 posted on 12/10/2007 10:00:11 AM PST by Rb ver. 2.0 (Global warming is the new Marxism.)
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To: dakine

You don’t need 20% down. There’s plenty of 100% financing programs out there. The credit restrictions have been tightened up but the money is still there for those who qualify.


15 posted on 12/10/2007 10:01:51 AM PST by Rb ver. 2.0 (Global warming is the new Marxism.)
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To: dakine

“Where are the folks going to get the financing for all these home contracts? 20% down...good credit...good income....”

Here’s one way: A cheap dollar makes it less profitable to ship jobs overseas. Therefore, more jobs here, more factories built here.

Here’s another: A foreign investor buys a big U.S. office building. A U.S. investor now has to invest his money elsewhere. Maybe he builds a subdivision.


16 posted on 12/10/2007 10:30:29 AM PST by live+let_live
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To: Fairview
Proximity to Metro and other commuter access was important in determining price. Four percent is not chickenfeed but it’s a lot better than the 50% some “experts” were predicting.

As in any real estate transaction, the key is always 'location, location, location'.

The real estate market is in a low cycle . We'd been through two of them since we bought our home 20 years ago. Right after we bought it, it fell 20% in value over the next two years. Ten years later, the same thing happened, though it didn't fall quite so far. In this third one, we're experiencing another 20% drop in our area.

Sellers have been lowering their prices for the last 6 months, and some houses still have not sold. But I've noticed that only one or two have gone any lower in the last three months. I guess the sellers are staying put, and waiting the buyers out. At some point, there won't be any new listings and the buyers, if they want to get a house, will have to get something that's already there. When buyers see that they won't be getting anything for any less than is out there now, they'll start buying again. I'm sure many were waiting for the 'bottom', and I think it's here.

I'm looking for things to start moving again in the Spring. I'm hoping so, anyway, cause we're looking to put ours on the market in the Summer. We don't really HAVE to sell, so we can wait longer, if need be, but we'd like to move South. We're doing some upgrades to ours because what was acceptable to us in 1988 isn't what folks are looking for in 2008 in the way of Master Suites and kitchens. We're fortunate also in that we can do almost all the work needing to be done, so the upgrades we do won't cost us 'retail', and we'll realize any profit they might bring.

17 posted on 12/10/2007 12:45:24 PM PST by SuziQ
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To: dakine
Where are the folks going to get the financing for all these home contracts? 20% down...good credit...good income....

The media seems to have convinced folks that because of the Subprime mortgage fiasco, real estate financing has dried up. Nothing could be further from the truth. Subprimes actually accounted for only a small proportion of mortage financing in this country. There are mortgage companies advertising all over the place, and not just for the cream puff type mortgages.

If someone has decent credit, and a stable income, they will be able to get a mortgage, so it is a good time for folks who have been holding out, to look at the homes available in their areas.

18 posted on 12/10/2007 12:56:47 PM PST by SuziQ
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To: BenLurkin

Talked with a top real estate broker a couple weeks ago. She has left real estate and is now in insurance. Real estate is dead.


19 posted on 12/10/2007 12:58:55 PM PST by RightWhale (anti-razors are pro-life)
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To: BenLurkin

Realtors being objective, unbiased folks who have no personal financial interest in their efforts to talk up the real estate scene.


20 posted on 12/10/2007 7:15:06 PM PST by OldArmy52 (Bush's Legacy: 100 million new Dem voters in next 20 yrs via the 2007 Amnesty Act.)
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To: KarlInOhio

Only reason I didn’t buy gold since the price peaks of 1980 was that despite gold/silver prices falling for 20 years after that peak, the same folks who were urging everyone to buy, buy, buy at the peak, continued to urge buy, buy, buy as the metals fell and fell.

Talk about a monomessage.

Eventually, I just tuned them out.

Would have bought at the lows a few years back otherwise.


21 posted on 12/10/2007 7:18:14 PM PST by OldArmy52 (Bush's Legacy: 100 million new Dem voters in next 20 yrs via the 2007 Amnesty Act.)
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To: OldArmy52
Now probably isn’t as good a time to buy gold as when it was $400- an ounce but who can tell the future?

One thing about housing though — you can live in your house no matter what becomes of its price.

22 posted on 12/10/2007 8:05:01 PM PST by BenLurkin
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