Market Conditions - April 17, 2006 by Carla L. Davis
The U.S Commerce Department reported late last month that the month of February saw a 10.5 percent decline in sales of newly built single-family homes. Most reports point to the Western region of the United States as having the most difficulty moving new homes, which comes as no surprise to some experts who already predicted a regional slow down for the area. "The San Diego real estate market has been slowing down for almost 2 years now," remarked one California expert. The market appears slightly unbalanced, as inventories increase (supply) but demand for housing goes down. The number of homes sold overall -- not just new homes -- is down 28 percent from 2005. April is forecast to be down 25 percent. The average price for homes in March was $635,775 -- up 11 percent from last year -- for the city. But not all of the experts expect this slump to continue, in fact many experts are downright optimistic. The National Association of Home Builders' (NAHB) Chief Economist, David Seiders, reports, "Referring to a 29.4 percent decline in new-home sales reported for the West region -- it would not be unusual for that number to be revised upward or to show some rebound in the next report." Seiders remains upbeat about the state of new housing, noting that many reports are too localized to carry much weight, with numbers fluctuating from month to month. Another area of the west, known for its mild and temperate climate, is Salem, Oregon. One local expert reports, "It appears to me that the expected general slow down in the national housing market for 2006 may also apply to the Salem area." Less activity than in 2005 is obvious, but this city is still experiencing rising prices. The average sales price in the Salem area for a new single family residence is around $230,000 -- up considerably from years before -- though still below the national average. This affordable pricing may be just what Salem needs to kickstart the market in 2006. | 
