Home prices built up for a fall
High new and existing house inventories likely to lead to lower costs for the first time since 1993.
Kathleen M. Howley / Bloomberg News
U.S. home prices may fall for the first time since 1993 as a record number of homes for sale gives buyers the upper hand in negotiations, the National Association of Realtors said.
"We'll probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory," David Lereah, NAR's chief economist, said Thursday.
The inventory of new and existing homes for sale has swelled to record levels as the five-year U.S. housing boom comes to an end. Shares of U.S. homebuilders slid almost 6 percent in the last two days as Hovnanian Enterprises Inc. reported a 34 percent reduction in earnings, followed by Beazer Homes USA Inc. and KB Home both lowering their earnings forecasts.
Short-term housing investors, so-called "flippers," are putting their properties up for sale, making for "an increasingly challenging market," KB Home CEO Bruce Karatz said, detailing his firm's 43 percent drop in new orders.
The last time the monthly U.S. median price for an existing home fell below the year-ago level was February 1993, when it dipped 1.1 percent.
The median price of new homes probably will rise 0.2 percent on an annualized basis in 2006, the worst performance since prices fell in 1991, as the market was mired in a housing depression, Lereah said. The median price for an existing home probably will gain 2.8 percent, the slowest rate since 1992, according to NAR data.
The median price for a condominium dropped 0.3 percent to $225,800 from a year ago, the first decline on record, while the median for a single-family home rose 3.7 percent to $227,500, the slowest pace in six years.
The U.S. inventory of unsold existing homes hit 3.86 million in July, the highest ever, according to NAR. New homes for sale reached a record 568,000, according to Census Department data.
High new and existing house inventories likely to lead to lower costs for the first time since 1993.
Kathleen M. Howley / Bloomberg News
U.S. home prices may fall for the first time since 1993 as a record number of homes for sale gives buyers the upper hand in negotiations, the National Association of Realtors said.
"We'll probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory," David Lereah, NAR's chief economist, said Thursday.
The inventory of new and existing homes for sale has swelled to record levels as the five-year U.S. housing boom comes to an end. Shares of U.S. homebuilders slid almost 6 percent in the last two days as Hovnanian Enterprises Inc. reported a 34 percent reduction in earnings, followed by Beazer Homes USA Inc. and KB Home both lowering their earnings forecasts.
Short-term housing investors, so-called "flippers," are putting their properties up for sale, making for "an increasingly challenging market," KB Home CEO Bruce Karatz said, detailing his firm's 43 percent drop in new orders.
The last time the monthly U.S. median price for an existing home fell below the year-ago level was February 1993, when it dipped 1.1 percent.
The median price of new homes probably will rise 0.2 percent on an annualized basis in 2006, the worst performance since prices fell in 1991, as the market was mired in a housing depression, Lereah said. The median price for an existing home probably will gain 2.8 percent, the slowest rate since 1992, according to NAR data.
The median price for a condominium dropped 0.3 percent to $225,800 from a year ago, the first decline on record, while the median for a single-family home rose 3.7 percent to $227,500, the slowest pace in six years.
The U.S. inventory of unsold existing homes hit 3.86 million in July, the highest ever, according to NAR. New homes for sale reached a record 568,000, according to Census Department data.
No comments:
Post a Comment