Wednesday, December 28, 2005

What's on the Horizon for the Housing Market

What do other industry experts predict for 2006? Here's a roundup of opinions on the 2006 housing market from industry experts.

* According to the National Association of Home Builders, following strong growth over the past three years, home sales and housing production will ease back next year to around 2004’s historically healthy levels. “We’re looking for a good economy through 2006, with GDP growth remaining strong and with job creation running at roughly the same pace as in 2005 – key positive factors in the housing outlook,” said NAHB economist David Seiders. “Multi-family is doing well, with the condo share of the market up to about 50 percent at this point…We think multi-family starts will be pretty stable, with condos losing some market share in the year ahead and the rental side regaining some ground.”

The housing market for 2005 is headed for a fifth consecutive annual record, and sales activity in 2006 is expected to be the second best year in history, according to NAR. NAR economist David Lereah said: “The slowdown amounts to a tapping of the brakes on a hot market. Home sales are coming down from the mountain peak, but they will level-out at a high plateau–a plateau that is higher than previous peaks in the housing cycle.” The 30-year fixed-rate mortgage should trend up modestly and reach 6.6 percent during the second half of 2006.

According to Better Investing's Voice of the American Shareholder (VOAS) poll, the real estate industry is surpassed only by energy as a leading investment opportunity. More than 1,000 investors participated in the most recent VOAS poll. It is the second consecutive year that real estate has commanded a spot as one of the top investment choices in the survey, having debuted last year as number one.

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