2007 Projections

David Lereah, Chief Economist for the National Association of Realtors (NAR) projected that: "The bad news is mostly behind us....many markets throughout the country are poised to pick up in 2007 and are on track for a full turn around in 2008"

He did except the major "coastal" markets especially Miami and California coastal properties.

Now for some numbers:

In 2006, inflation averaged 3.4% and the 30 year fixed rates averaged 6.5%. That's a slim margin for the banks meaning real interest rates are still low.

In 2006, existing home sales totalled 6.5 million homes, down 8.5% from 2005. Existing home sales projected to be 6.4 million, off in 2007 which will be down only 1.5% from 2006.

Lereah has been right on with the numbers since taking over as chief economist for NAR six years ago. He predicted the "corrections" in the market in 2004 and amplifying them in 2005.

Jacksonville, Florida, with it's coastal markets, inland markets and rural markets will weather the storm with some negative growth into mid-2007.

The beaches have experienced serious price declines in the condo area due in part to rising association fees. Many complexes were converted at the end of 2005 going into 2006 and are already experiencing "special assessments" and skyrocketing association fees. Once the shock wears off, that market too is expected to normalize.

Richard Newquist
Coral Shores Realty