Realtors Increasingly Worried About Housing Market

The nation’s housing market is looking even more grim, according to a report today from the National Association of Realtors.
The group now expects sales of existing homes to drop 4.6 percent from 2006 to 6.2 million, as mortgage rates edge higher later this year.

Earlier this year, the Realtors had predicted a 2.2 percent drop in sales, but recent bad credit mortgage fears have upped levels of concern.

Median home prices, meanwhile, are now expected to decline by 1.3 percent to $219,100. The earlier forecast was for a 0.7 percent drop.

“Overall housing levels are historically strong, but sales remain sluggish compared to the recent boom,” Lawrence Yun, the group’s senior economist, said in a statement.

“Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year.”

“It’s important to keep in mind that all real estate is local, and many markets are expected to have higher sales and strengthening prices during the second half of this year.”

The “all is real estate is local” mantra rings especially true in the sunny but super pricey Silicon Valley real estate market, where median prices are still the rise.

This is mostly because sales have been stronger in expensive communities with homes that are just a short commute away from major employers - not indicative of a large-scale surge in mortgage activity throughout the state or country.

In other parts of the Golden State, California mortgage loan activity has tapered off significantly as prices have escalated higher than buyers can afford.

SOURCE: San Jose Mercury-News