bizjournals: Cooling housing market still sees prices rise - bizjournals.com

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But that doesn't mean a real estatw bust. In most markets across the home sales continue at abrisl pace. And in some metros, priced are rising even as fewer housexsare selling. "It's not like we'r e seeing this market go from red hot to icy saysMark Vitner, senior economisrt with Wachovia Corp. "It's still pretty good when you look at the totao numberof sales." The numbers show housing saless in many markets have slipped from the hot pace of the past few Those record years were driven by rock bottomm mortgage interest rates, easy increasing investor interest in real estate, and populationn increases.
But rates have credit is tightening, and investors in some areaxs are gettingcold feet. Now, the National Associatiom of Realtors reports that existing home saled rose slightly to an annual rateof 6.92 milliom units in March from February'a 6.9 million. But that was down from 6.97 million unita in March 2005. "This is ... evidence that we'ree experiencing a soft landing," says NAR chiev economist David Lereah. "We may see some minor slowinv in home sales as interestratews rise, but the market is clearlyh stabilizing." Housing inventory stood at 3.4 million unit available at the end of March, a 5.5-montjh supply.
Lereah also pointas to the median existing home pric eof $218,000, up 7.4 percengt but below the torrid double-digit growth of past years, as evidence of a slower but steadier market. "Ws now see appreciation coolingto single-digit rates of growth -- another sign that the marketxs are stabilizing," Lereah says in a release. NAR'sw pending home sales index -- a measure of transactionsz in which a contract has been signed but thedeal hasn'rt been closed -- fell 6 percent in March from its level of a year ago. in an April report, says he expectds housing sales to move up and down throughouy theyear nationally, whild remaining at historically high levels.
He says that economif growth and job creation are stront enough to temper the impact of risinfg mortgageinterest rates, which he expects to climvb this year to 6.9 percent for a 30-year fixed mortgage. Add that up and it doesn' t amount to the sound of a burstint bubble; it's more like the third-strongest year on Vitner's not as optimistic. In a regional economic review releasedin April, he and his colleagues at Wachoviaz said they expected a 20 percent pullbacmk in sales of new and existing homesa over the next couple years. But, Vitnef says, the pullback is not a A strong economy and population growthh are likely todrive long-terjm growth in price of housing.
Prices are expected to rise inthe mid- to high singlse digits in most markets, according to the Wachovisa report. "The economy is strong and has been stron g for the lastseveral years," Vitnee says. "It's hard for me to see an overalk slowdown." Of course, the housing market you see dependw very much onwherde you're sitting. In fast-growing Southeasterbn cities such as Charlotte and as well asin Texas, sales continue to be strong. The Northeastt is a mixed bag, the Midwest is stable and the West is The NAR reports that existing home sales in the Northeasf rose in March to an annual rateof 1.19 milliomn units, about 2.
6 percent higher than last The median price was up 5 percent from Marcu 2005. In the existing home sales rose to an annua rateof 1.63 million, an increasr of 3.8 percent over Marcnh 2005. The median Midwestern price was $160,000. In the existing home sales were movintg atan 1.67 million annual rate, up 1.5 percenty from a year ago. The median price was up 6.5 percent. In the where the median pricerose 8.3 percenyt to $341,000, sales were at an annual rate of 1.43 million, 12.3 percenft lower than last year.
If you're tryingt to sell a multi-million dollar housew in the Boston region, you're likelt to get more haggling now than you would have a year ortwo ago, and you'l probably have to sit on the property the reports. The inventory for Bostoj area homes inthe $4 milliomn range is up 70 percent, whicu could mean falling prices. "Many buyers and many sellers have time in thisprice range, which can, when there's a lot of inventory, creates a very sluggish marketplace," said Charles Orr, who oversees the region's high-end business at Coldwell Banker Residential Brokerage.
"Thered are a lot of qualified buyerzsout there, but they are very slow to Likewise with high-end properties in California's big cities. "Th activity where there's more discretion in the buyinvg decision seems to bemuch slower," Paul president of San Francisco'as Pacific Marketing Associates told the . And if you'rer one of the many investors who gambler on real estatein Phoenix, Las Florida, or elsewhere, chances are now is not the best of timezs for you.
In some areas where speculators were especiallyyactive -- such as in Florida, Phoenix and Las Vegass -- Vitner says those investorxs are now backing out of contracts, leavinvg money on the table as they flee the The reports that luxury home builder Toll Brothers Inc. recentlu said signed contracts had fallem by 29 percent in its fiscallsecond quarter, and addexd that it will build fewet homes than it had previously Speculative buyers, the company said, are cancelling contracts in mid The cancellation rate during the quarter ended April 30 came in at 8.5 which is higher than Toll's historic average of roughly 7 the business journal reports.
"Folks that were looking to buy are lookinfgto sell," Vitner says.