- THE MAGAZINE
According to NAR chief economist Dr. David Lereah, home sales this year have defied projections.
"The housing market is proving to be much more resilient than most analysts expected, and we will be just shy of the all-time record for existing home sales, which was 5.21 million transactions in 1999," he said. "In addition, new-home sales will set a new record this year, so it doesn't get much better than this."
Lereah said existing-home sales will rise 1.6 percent this year to a total of 5.20 million units, the second highest on record, then slip 1.0 percent to 5.15 million in 2002, which would be the third-best year. He also anticipates new-home sales will increase 0.8 percent in 2001 to a total of 888,000 units, then ease by 0.4 percent next year to 885,000 units, which would tie the previous record in 1998. Lereah forecasts housing starts to grow by 1.6 percent to a total of 1.60 million units this year, and then decline 3.5 percent in 2002 to 1.55 million units.
NAR forecasts the national median existing-home price for 2001 will be $146,600, an increase of 5.5 percent over last year, then rise another 3.5 percent in 2002 to $151,700. The typical new home price is expected to be $172,200 this year, up 1.9 percent from 2000, and then rise 3.6 percent next year to $178,400.
"With a slowdown in the upper-end of the market, the median new-home price has been fairly low over the last few months, which accounts for the small annual increase in the new home price this year," Lereah said.
NAR expects the current recession to turn around by the spring of next year. U.S. economic growth, as measured by the Gross Domestic Product (GDP), will go from a 1.5 percent rate of contraction in the current quarter to a 1.9 percent positive growth rate in the second quarter of 2002. Consumer price inflation for this year will be 2.9 percent, and then slip to a 1.8 percent inflation rate for 2002.
Lereah forecasts the unemployment rate to rise gradually to 6.1 percent by second quarter of next year before easing in the second half, while inflation-adjusted disposable personal income should grow a healthy 3.9 percent in 2001 thanks to tax rebate checks, and another 2.2 percent next year.
NAR (www.nar.realtor.com) is the world's largest professional association, with more than 750,000 members. NAR members are involved in residential and commercial real estate as brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry.