Sunday, May 21, 2006
National Residential Real Estate News
Speculators and rising interest rates have ended the largest acceleration ever in existing-home prices, but the process is “a needed cleansing” that will help restore balance. Nationally, homes appreciated a remarkable 12.5 percent on average in 2005. Appreciation for 2006 will cool to 5.7 percent. But even with the slowdown, 2006 will be the fourth best year ever for residential real estate sales with an estimated 6.62 million existing homes sold.
In 2007, expect to see existing-home sales rise slightly to 6.7 million units but appreciation to slow to 4.2 percent. To some degree, the next year or two will be “a tale of two cities.” Cities such as San Diego, Miami, and Naples, Fla., that have seen high price appreciation will see sharp drops in sales. Already, between first quarter 2005 and first quarter 2006, existing-home sales declined by 15 percent to 20 percent in Florida, California, and Arizona.
In 2007, expect to see existing-home sales rise slightly to 6.7 million units but appreciation to slow to 4.2 percent. To some degree, the next year or two will be “a tale of two cities.” Cities such as San Diego, Miami, and Naples, Fla., that have seen high price appreciation will see sharp drops in sales. Already, between first quarter 2005 and first quarter 2006, existing-home sales declined by 15 percent to 20 percent in Florida, California, and Arizona.
