Real Estate Market to "Normalize" According to NAR 2006 Real Estate Forecast

Today, the NAR commented on the 2006 real estate market. The heading reads "Normalize" which may be a careful choice of words as further down in the forecast... "A lot of demand has been met over the last five years, and a modest rise in mortgage interest rates is causing some market cooling. Along with regulatory tightening on nontraditional mortgages, there will be fewer investors in the market this year,".

Here are some highlighted of sales figures from the report:

"After setting a fifth consecutive annual record, projected to 7.10 million units for 2005, * existing-home sales are forecast to ease by 4.4 percent to 6.79 million this year, which would be the second highest on record. New-home sales, which should be a record 1.29 million for 2005, are expected to decline 6.0 percent to 1.21 million in 2006 – that also would be the second best year in history. Total housing starts for 2005 are seen at 2.07 million units – the highest since setting a record 1972 – with a 6.6 percent slowing to 1.94 million this year."

In the report is also shows that national home prices increased 12.9% in 2005 and are forecasted to go up 5.1% this year.

We will continue to watch the California real estate market and report numbers for local regions as we find them.