June 6, 2007 - Realtors Trade Group Says Home Sales, Price To Fall More
The NAR says sales of existing homes should be 6.18 million this year and 860,000 for new homes, 5 percent and 18 percent lower, respectively, than last year.
Meanwhile, the national median sales price for an existing home will be $219,000 and $240,800 for a new home, both representing the first annual drops in price the association has ever predicted.
With each passing month, the trade group continues to ratchet down its earlier forecasts, indicating home sales and prices falling at a faster rate this year.
When the NAR made its first annual forecast earlier this year, it expected existing-home sales to reach a pace of 6.42 million. Just last month, the forecast stood at 6.29 million. Last month, the group predicted new home sales would reach 864,000 units.
Price revisions continue to put lower price tags on homes this year. In March, the prediction was for existing homes to actually appreciate 1.2 percent. The NAR now predicts that median price to drop 1.3 percent this year, double the drop forecast just two months ago. Last month, the NAR expected prices for new homes to remain flat for the year. Today’s announcement means prices will fall 2.3 percent.
If these price declines stick, it will be the first time that’s occurred in the 40 years the NAR has kept track of home sales and prices.
Regardless of month-to-month revisions, the current figures are well off the marks that actually occurred last year, according to the group’s numbers. Existing-home sales, for example, recorded in 2006 were 6.48 million. New home sales were 1.05 million last year.
The trade group made one more prediction in its latest report. Housing starts should total 1.43 million this year vs. the 1.8 million recorded last year.