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A press release posted on the National Association of Realtors Web site, has admitted something analysts have been saying for a while: The real estate boom’s over.
That doesn’t mean the organization is cooling down its tone when it comes to fanning the real estate industry’s fire, however. The announcement that “the housing boom has ended” was couched in notably positive tones. It was stressed that home sales rates are still healthy, historically speaking, and that price appreciation is returning to normal.
“In recent years we were occasionally challenged to find appropriate superlatives to describe surprisingly high home sales,” David Lereah, the organization’s chief economist is quoted in the press release as saying. “Now the housing market has cooled, but 2006 is still expected to be the third strongest on record. In this case, experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability. But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable.”
According to the same press release, home sales rates are expected to drop 6.8 percent this year from their record levels in 2005. Meanwhile, the NAR is predicting that the national median existing home price for all homes will rise 5.3 percent this year to $231,300.