Slower sales forecast for 2006

Home sales will probably be lower than originally projected this year, according to a new forecast from NAR, as the market works its way through increasing inventory and high prices. Existing home sales are projected to fall 7.6% to 6.54 million in 2006, which would still make it the third-highest year on record after 2004 and 2005. Home prices are expected to rise 2.8% nationally. "This year sales are slowing, homes are plentiful and sellers are negotiating. Under these conditions, well probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory, explained NAR Chief Economist David Lereah.

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Is Virtual Real Estate More Than An Oxymoron?

How can something that is virtual be real? Over 6 million people apparently find no problem with the concept as they socialize, create, build, and become willing advertising test dummies in a not-quite make believe world called "Second Life."

We will try our best to explain the concept and hope that gradually our reasons for looking at what must be called a real estate phenomenon will become obvious.

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Real Estate Market - Weak and Strong Areas

You want to know whether the market is strong if you are buying or selling real estate. Having such information lets you know how flexible you need to be in offers.

Sales have slowed for large parts of the east and west coasts for sellers. Good news for buyers there. On the other hand, sales are picking up in parts of the interior of our country. A cheerful note for sellers. Let's look at what is happening, why and what it means to you.

A lot of things affect market strength, but some more than others. Is employment strong in your area? Are there jobs available that pay well? Plentiful jobs that pay well help to strengthen the real estate market.

Is there a high inventory of newly built, but unsold, housing in your area? Has this inventory been increasing or decreasing? Sales tend to slow and prices decrease when inventory is very high. This often happens when prices have moved above what average families in an area can afford.

Where Home Inventories Are High

In Washington, D.C., Miami, Florida, and Phoenix, Arizona inventories of new unsold housing have increased greatly in the last twelve months. Those markets tend to be better for buyers than in the recent past.

Where Home Inventories Are Low

In Texas, Dallas and Houston have very low housing inventory increases and a good employment picture. Prices are increasing there. Families are buying homes. Investors are scouting out the area and buying, too. This has created a situation that is very helpful to sellers, which is somewhat ironic given that Texas generally missed out on the housing boom of the last six years.

What's Going On In Your Market

How do you figure out what the market is like in your area? Read the local news paper. Are there "price reduced" or "buy now before the next price increase" phrases in ads for homes being sold? Are there stories about lay-offs or about new employers coming to town? Call your local builders' association, realtors' association, Chamber of Commerce. Ask lots of questions about the number of unsold houses today as compared with the number a year ago. Ask the Chamber of Commerce about employers coming to town or leaving. Visit models in new communities and ask lots of questions there, too.

You will soon have your own opinion about what is going on in the part of the country in which you want to buy or sell. Your strategy needs to be adjusted to the strength of your position as a buyer or seller. Understanding the market you will be dealing in is a good place to start.

About the Author

Raynor James is with the FSBO site - FSBOAmerica.org - homes for sale by owner.

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