bizjournals: Cooling housing market still sees prices rise - bizjournals.com

yvejodo.wordpress.com
But that doesn't mean a real estates bust. In most marketss across the country, home sales continue at a briski pace. And in some metros, prices are risinh even as fewer houseseare selling. "It's not like we'r seeing this market go from red hot to icy saysMark Vitner, senior economist with Wachovia Corp. "It'sx still pretty good when you look at the totalk numberof sales." The numbers show housing sale in many markets have slipped from the hot pace of the past few Those record years were driven by rock bottoj mortgage interest rates, easy increasing investor interest in real estate, and populationn increases.
But rates have risen, credit is and investors in some areas are gettingcold feet. Now, the Nationaol Association of Realtors reportsa that existing home sales rose slightlu to an annual rateof 6.92 million unitas in March from February's 6.9 But that was down from 6.97 milliob units in March 2005. "Thiz is ... evidence that we're experiencing a soft says NAR chief economistDavid Lereah. "We may see some minor slowing in home saleds as interestrates rise, but the market is clearl stabilizing." Housing inventory stood at 3.4 millionb units available at the end of a 5.5-month supply. Lereahy also points to the media existing home priceof $218,000, up 7.
4 percent but belowq the torrid double-digit growtjh of past years, as evidence of a slower but steadiedr market. "We now see appreciation coolinfgto single-digit rates of growthn -- another sign that the marketws are stabilizing," Lereah says in a NAR's pending home sales index -- a measure of transactionas in which a contract has been signedd but the deal hasn't been closed -- fell 6 percen in March from its level of a year ago. in an April report, says he expects housinf sales to move up and down throughout the year while remaining at historicallyhigh levels.
He says that economidc growth and job creation are strong enough to tempedr the impact of rising mortgagdinterest rates, which he expectss to climb this year to 6.9 percent for a 30-year fixed mortgage. Add that up and it doesn'tr amount to the sound of a burstingf bubble; it's more like the third-stronges year on record. Vitner's not as In a regional economic reviewa releasedin April, he and his colleagues at Wachovis said they expected a 20 percent pullback in salese of new and existing homes over the next couplee years. But, Vitner says, the pullback is not a A strong economy and population growth are likelyu todrive long-term growth in price of housing.
Pricew are expected to rise inthe mid- to high singlse digits in most markets, according to the Wachoviq report. "The economy is strong and has been strongb for the lastseveral years," Vitne r says. "It's hard for me to see an overall Of course, the housing market you see dependx very much on whered you're sitting. In fast-growin Southeastern cities such as Charlotteand Atlanta, as well as in sales continue to be strong. The Northeast is a mixeed bag, the Midwest is stable and the West is The NAR reports that existing home salesw in the Northeast rose in March to an annual rateof 1.19 million units, about 2.6 percen t higher than last year.
The median priced was $275,000, up 5 percent from March 2005. In the existing home sales rose to an annualk rateof 1.63 million, an increase of 3.8 percent over Marcy 2005. The median Midwestern price was Inthe South, existingg home sales were moving at an 1.67 million annual rate, up 1.5 percent from a year ago. The mediabn price was $181,000, up 6.5 percent. In the West, where the medianm price rose 8.3 percent to sales were at an annual rateof 1.43 12.3 percent lower than last year.
If you'rew trying to sell a multi-million dollar hous e in the Boston region, you'red likely to get more haggling now than you would have a year ortwo ago, and you'lk probably have to sit on the property the reports. The inventory for Bosto area homes inthe $4 million range is up 70 which could mean fallinh prices. "Many buyers and many sellersw have time in thisprice range, which can, when there'sx a lot of inventory, create a very sluggish marketplace," said Charles Orr, who oversees the region's high-end business at Coldwell Banker Residential "There are a lot of qualified buyers out but they are very slow to Likewise with high-end properties in California' big cities.
"The activity where there's more discretion in the buying decision seems to be much Paul Zeger, president of San Francisco's Pacific Marketing Associatesd told the . And if you're one of the many investorsw who gambled on real estate in Las Vegas, Florida, or elsewhere, chances are now is not the best of timews for you. In some areaas where speculators were especiallyactivre -- such as in Florida, Phoenix and Las Vegaas -- Vitner says those investors are now backin g out of contracts, leaving money on the tablse as they flee the The reports that luxury home builderr Toll Brothers Inc.
recently said signer contracts had fallen by 29 percen t in its fiscalsecond quarter, and addedf that it will build fewer homesd than it had previously planned. Speculative the company said, are cancellinh contracts in mid construction. The cancellation rate duringb the quarter ended April 30 came inat 8.5 which is higher than Toll'sx historic average of roughly 7 the business journal reports. "Folksw that were looking to buy are lookinfto sell," Vitner says.