Friday, October 14, 2005

NAR: 2006 Predictions

The National Association of Realtors (NAR) is forecasting that in 2006 "the median existing-home price to grow by 5.2 percent and the median new-home price to rise 7.1 percent." It is simply not going to happen. There has been such strong national home price appreciation the past few years that an additional 5% in 2006 is unrealistic. The bubble markets will be seeing price declines next year. A national 5% price appreciation for existing homes is not in the cards.

15 comments:

  1. David

    the NAR is trying to make its members and the gullible public believe their misinformation and propaganda.
    I wonder in a year how many realtors will have left this 'profession'.
    Locally in the Hartford CT area, realtors of any integrity have said it has slowed from the spring, inventory has risen, and prices have reached a plateau.

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  2. Oh, I don't know. The bubble markets are limited to the east and west coast and Nevada, which compromise six, maybe ten states. That's only 1/5 of the states at most. The other 4/5 are stable markets.

    Just as middle-income Californians are fleeing in droves to other states that are more affordable, is it inconceivable that people would flee the bubble markets to move into stable markets?

    Would that not result in slight appreciation in those markets? 5% appreciation nationwide is reasonable. In South Texas, the appreciation was 3.3% over last year.

    As to the question of how many realtors will still be in the profession within, say, two years. 90% of the people who get real estate licenses leave the profession within two years, regardless of the market. You know why? Because it's not easy selling homes.

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  3. "The bubble markets are limited to the east and west coast and Nevada, which compromise six, maybe ten states."

    The states which include bubble markets are MA, CT, RI, NY, NJ, PA,MD, VA, FL, NV, HI, OR, WA, CA, AZ, NM ( there maybe others I am missing ).

    Other areas have had very strong price appreciation in the last 5 years. Even Chicago has seen 47% price apprecation in 5 years.

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  4. Well, price appreciation is to be expected, as more and more people move into affordable markets. Bubble appreciation results from feverish speculation. Texas has not experienced that, and I expect a good many other states have not either. So I still think 5% appreciation nationwide is not an unreasonable figure.

    That said, we might well see nationwide depreciation as the credit or finance bubble bursts. But then we might not. You never know.

    The problem with bubbles is that you don't know you're in one until it bursts.

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  5. "The problem with bubbles is that you don't know you're in one until it bursts."

    Nope. Look at the fundamentals. Compare to history. In the bubble markets ( LA, San Fran, Miami) we are in a bubble and there will be significant price declines.

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  6. I agree with you, but really, we can't expect them to say anything else. If the NAR said "this market is going to stagnate" its membership would freak out. They'd blame NAR for contributing to all that nasty bubble talk. Realtors would withdraw, taking their dues with them. Nope. NAR has to say everything's gonna be alright. That's their job.

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  7. Minor in Geography here

    Those 'bubble markets' are perhaps the most important regions in America. If they fall, Nebraska, Indiana and all the hinterlands will feel the pain. What does that spell? Recession-

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  8. today i saw a Wall Street honcho on CNBC talking about the economy.

    he mentioned the housing market as a possible factor as it was no longer going up.

    what did he say it was going to do?
    either stay flat, go down a little, or go down a lot.

    how brilliant!!

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  9. A lot of people seem to be assuming that realtors are inflating this bubble, when nothing could be further from the truth. It is the lenders and the sellers that are fueling price increases. Realtors are simply trying to negotiate deals between willing buyers and willing sellers.

    If a lender makes a risky loan to a buyer, is the realtor not supposed to negotiate a deal for him a house?

    The simple reality is this. Some of the bubble markets (New York, for example) were probably undervalued to begin with. So these markets have seen rapid price increases. Will they then see rapid price decreases? Not necessarily.

    Cheap money, easy credit, and creative loans have resulted in rampant speculation and rising prices in real estate. This will all level out. But will it result in rapidly decreasing prices? I doubt it.

    The vast majority of homebuyers are long-term investors. They buy houses to live in, not make money on. Sure, there has been a good number of investors buying properties to flip for a quick profit, but that number is low compared to the number of homebuyers.

    It is true that some areas are now over-valued (California and Las Vegas come to mind), but most areas are not. I can see housing prices falling where they are over-valued, remaining stable where they are not, and increasing where they are under-valued. When all is said and done, that could easily result in 5% appreciation nationwide.

    NAR is not in the business of giving its memebers, or the general public for that matter, fraudulent or dishonest advice. It's simply not good business, not to mention unethical.

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  10. "NAR is not in the business of giving its memebers, or the general public for that matter, fraudulent or dishonest advice."

    No thats not the business of the NAR to give "fraudulent or dishonest advice," however they have been bubble cheerleaders. Some NAR members have made a tremendous amount of money from the housing bubble. NAR has also seen its membership grow extroadinarily in the past few years. When the bubble ends many Realtors will be in for tough times.

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  11. DO NOT TURST THESE SLIMEBALLS.

    HOUSING IS GOING TO COLLAPSE. IN BOSTON ALONE PRICES HAVE ALREADY DROPPED 15% ACCORDING TO THE LATEST MLS DATA.

    DAMN CROOKS NEED TO BE EXPSOED FOR WHAT THEY ARE.

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  12. "The bubble markets are limited to the east and west coast and Nevada, which compromise six, maybe ten states."

    The states which include bubble markets are MA, CT, RI, NY, NJ, PA,MD, VA, FL, NV, HI, OR, WA, CA, AZ, NM

    A quick caluculation shows that the 16 states listed consitute 47.25% of the 2004 population. A third of the states but almost half the population (approx 138 mil)

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  13. I would agree that the NAR has been a big cheerleader in this bubble- every news release has them waving their pom poms- bragging how well the boom is doing. Also I doubt any realtor is going to 'talk down' the market- if he/she did they would make no sales. I also doubt that realtors are totally 'honest' they are mostly 'slippery' in a way that they are resourceful enough not to get sued. They talk out of both sides of their mouth.

    Connecticut as Curt said above is in a bubble- despite what the Hartford Courant says- housing-both SFH and condo's are probably 25% overpriced.

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  14. to skytrekker. What the hell are you talking about?!! Who is "they"? When you generalize like that you come off like a lowlife idiot! DO yourself a big favor. Stick to the facts and what and who you know. DOn't make broad generalizations about people!! It is untrue and stupid!

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  15. hey dumbass, we've already seen better than 5%.

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