Market Conditions - March 14, 2006 by Carla L. Davis
As the National Association of Realtors releases its most recent figures, real estate professionals and homeowners alike breathes sighs of relief. David Lereah, NAR's chief economist, is reporting that the market is improving and bringing a much needed balance. "The cooling from overheated sales conditions in recent months is helping to bring inventory levels up to the point where buyers have more choices than they've seen in the last five years," Lereah said. "Annual price appreciation is still running at double-digit rates, but the cause of those sharp increases is going away. As the market readjusts, price appreciation should return to more normal rates of growth this year." This is great news for large and small cities who saw buyers scrambling to keep up with the ever increasing home values. Ridgefield, Connecticut, voted the best town with a population between 20,000 and 50,000 by Connecticut Magazine, was no exception to last summer's trend. Two thousand and five saw appreciation rates in the double digits (around 10 percent), which brought the average sales price to $950,000. While this price was considerably higher than the national average sales price, the market continued to bustle and is still experiencing healthy rates of appreciation -- even if they are not record breaking. NAR has reported that the average existing home price in 2006 should rise 5.8 percent to $220,300. Many experts, however, are still worried about the state of new construction. Hurricanes Katrina and Rita caused a surge in price of building supplies that is still being felt today. Many prospective buyers have been holding off buying, fearing interest rate hikes and economic unrest. The National Association of Home Builders reported at the end of February that "sales of new single-family homes fell 5 percent to a seasonally adjusted annual rate of 1.233 million units in January following upward revisions to the November and December rates.The January sales rate was 3.3 percent above a year ago." This means that the pace of late 2005 has not continued, but the number of buyers and sales are still 3.3 percent above what they were last year at this time. | 
