Market Conditions - July 26, 2006 by Carla L. Davis
The National Association of Realtors' latest report indicates that the market is flattening out. Sales are down and prices are up only slightly over last year. David Lereah, NAR's chief economist, reports, "Over the last three months home sales have held in a narrow range, easing to a level that is near our annual projection, which tells us the market is stabilizing. At the same time, sellers have recognized that they need to be more competitive in their pricing given the rise in housing inventories. Home prices are only a little higher than a year ago." What should buyers expect in today's national market? The median home price for existing homes is $231,000 -- up less than 1 percent from last year. Half as many homes are selling, while inventories are on the rise. NAR reports that inventories are up 3.8 percent -- which makes a 6.8 month supply. How did this slow down come about? Incredible rises in appreciation rates (think the 40 percent yearly increase in Florida), rising interest rates, and overall distrust of the economy have led to a flattening of the market. But this means that buyers have the upper hand. NAR President Thomas M. Stevens from Vienna, Va., says, "People who were discouraged by the bidding wars that were so common over the last few years are finding more choices now. Relative to the five-year housing boom, this year is a buyer's market in much of the country with plentiful supply, along with interest rates which remain historically favorable, so it's a good time to buy a home." | 
