Are We at the Bottom Yet?

The final numbers are in from the National Association of Realtors and as expected 2006 suffered a large drop in prices. After a five year boom driven by a strong economy and low interest rates the real estate market started to fall in 2006.

The figures from the National Association of Realtors showed that sales of existing single family homes fell 8.4 percent to about 6.5 million dollars. This is the largest annual decline since a 14.8 percent drop in 1989. The west coast was hit the hardest by the slump with sales down approximately 16 percent last year. Sales in the south were down 7 percent, while the Midwest and Northwest saw a drop of about 6 percent for the year.

The associations forecast calls for a drop of 1.2 percent in sales for 2007 and a 1.6 percent increase in the median price. When asked about this forecast Richard Berner, chief US economist at Morgan Stanley stated “I still think there’s further downside risk and the reason is that i t has become a buyer’s market with the imbalance between supply and demand both for new and existing homes out there.”  “We could see inventories go back up again in the existing housing market when people come back into the marketplace in the spring.”

Head on over to MSNBC to read more about if the housing market has bottomed out.