National Association of Realtors Predicts Existing Home Sales Recovery
Modest near-term movement is expected in existing-home sales, with a recovery in sales expected in the second half of the year, according to the latest forecast by the National Association of Realtors (NAR).
The forecast states the Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in May, fell 4.7 percent to 84.7 from a revised reading of 88.9 in April. It remains 14 percent below May 2007, when it stood at 98.5.
Lawrence Yun, NAR chief economist, said some pullback after a sharp increase in the previous month can be expected.
“The overall decline in contract signings suggests we are not out of the woods by any means,” Yun said. “The housing stimulus bill that is still being considered in the Senate is critical to assure a healthy recovery in the housing market, jobs and the economy.”
Yun also said location has never mattered more than in the current market.
“Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half,” he said. “Price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans.”
Rochester’s latest home sale statistics will be released later this month, but John Antetomaso, president of the Greater Rochester Association of Realtors (GRAR) said he, along with other agents in his office, continue to be busy during the summer months.
“We continue to be swamped, but the numbers have been coming back negative,” Antetomaso said. “I think it’s a result of how high our sales were in previous years.”
Karen Wingender, vice president of corporate and consumer affairs for Nothnagle Realtors, said East end branches such as Pittsford and Brighton are seeing extremely positive sales.
“Our outlying branches in Batavia and even in Wayne County are seeing record increases in sales,” Wingender said.
Antetomaso said that as long as new jobs are created in the area, the housing market will remain steady. He also said he will remain positive into the fall market.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the current market offers immediate benefits and long-term value for many buyers.
“Home buyers are getting a great deal right now,” he said. “Although inflationary expectations appear to be under control for the time being, sharper consumer price gains could lead to notably higher mortgage interest rates in 2009.”
According to NAR, existing-home sales are expected to grow from an annual pace of 5.01 million in the second quarter to 5.75 million in the fourth quarter. For all of 2008, existing-home sales should total 5.31 million, then increase by 5 percent next year to 5.58 million.
“The speed at which home prices have declined in a few select markets is unprecedented, but the large price declines in those areas have enticed bargain hunters back,” Yun said. “There have been reports of multiple bidding after the large price cuts, so it is possible that most of the price declines have already occurred in those markets.”
According to NAR, new-home sales natinoally are likely to fall by 32.3 percent to 525,000 in 2008 and decline another 3.4 percent next year to 507,000.
“In light of high inventory conditions, rising commodity prices and construction costs will curtail new home construction deep into 2009,” Yun said.
Housing starts, including multi-family units, probably will decline 28.7 percent to 966,000 this year before dropping another 9 percent in 2009 to 879,000, according to NAR.
The median new home price is expected to decline by 3.2 percent to $239,300 this year, then rise 5.3 percent in 2009 to $251,900.