Mayfair in Tampa Palms

Housing Market Update

May 12, 2006

Hello everyone:

This is an interesting article.

In Tampa, we are seeing more builder inventory and re-sales on the market which is giving Buyers more options. Also, days on market are now 60-120 days as opposed to days/weeks last year. The Tampa real estate market is still strong but not at the frenzied pace it was in 2005. It is slowly becoming a more ?“balanced?” market.

NAR: Housing market taking a breather but staying strong

WASHINGTON -- May 10, 2006 -- The housing market is settling but should experience its third best year in 2006, with job creation and a growing economy offsetting some of the effects of rising interest rates, according to the National Association of Realtors?® (NAR).

David Lereah, NAR?’s chief economist, says the market is adjusting to higher mortgage interest rates. ?“Coming off a prolonged period of record sales, housing is taking something of a breather this year,?” he says. ?“Even so, interest rates remain historically low, we?’ve added about 2 million jobs over the last 12 months and the economy continues to grow -- that will sustain healthy levels of home sales in 2006, but they?’ll stay below the peaks experienced during the last two years.?”

Lereah forecasts the 30-year fixed-rate mortgage to rise to 7.0 percent this summer and hold at that level during the second half of the year. The unemployment rate is expected to average 4.7 percent, compared with 5.1 percent in 2005, while growth in the U.S. gross domestic product is seen at 3.5 percent in 2006, the same as last year.

Existing-home sales are likely to fall 6.4 percent to 6.62 million in 2006 from a record 7.08 million last year. New-home sales are projected to drop 11.6 percent to 1.13 million from last year?’s record of 1.28 million. Housing starts should decline 3.7 percent to 1.99 million this year compared with 2.07 million in 2005.

NAR President Thomas M. Stevens says home prices are returning to normal patterns. ?“Since the supply of homes on the market has improved to roughly balanced levels, overall home price appreciation has cooled to single-digit rates,?” says Stevens. ?“Most of the country is now entering a period of equilibrium in the housing market, which is good for the long-term health of the sector. Owners in most areas can now expect steadier and more normal rates of return on their housing investment.?”

The national median existing-home price for all housing types is expected to rise 5.7 percent this year to $232,200, while the median new-home price is forecast to increase 2.2 percent to $242,500.

Regards,

Lyn Acer