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In 2006 Projected U.S. Home Sales To Be Second Best In History, Key Industry Observers Predict; Consumer Real Estate Confidence Highest In Three Years

By Monte Helme

In 2005 7.07 million home sales set a real estate record for fifth straight year. After five consecutive record years of existing homes for sale nationwide, key real estate industry observers are optimistic that 2006 will be the second best year in history and that the national median home prices will continue to increase, although at a slower pace that last year's 10.5%.

Additionally, the inventory of unsold homes for sale is currently at a five-month level. A six-month supply is generally indicative of a more balanced real estate market between buyers and sellers demand.

Consumer sentiment has also rebounded since last fall despite continued Middle East, energy home prices and mortgage rates concerns. January's 106.3 index rating by the Consumer Board was the highest in three years. Historically, home buyer activity increases as consumer confidence improves. Actual home sales usually close 30 to 90 days later.

David Lereah, chief economist for the National Association of Realtors, predicts a slight falloff in existing home values in sales in 2006: "This is part of the real estate market adjustment we're anticipating, with a soft landing in sight for the housing sector. The level of homes for sale activity is now at a sustainable level and is likely to pick up in the months ahead." He said that overall fundamentals remain solid, driven by population and job growth. Home sales totaled 7.07 million in 2005, up 4.2% over 2004. (See charts.)

Michael Bearden, president and CEO of HouseHunt, Inc., agrees: "Our quarterly Current Real Estate Market Conditions surveys accurately reflect - and in some cases anticipate -- these market changes. This knowledge gives our member agents a competitive edge as local real estate market experts in their exclusive marketplaces. Looking ahead, we feel very positive about our system, our positioning in the industry and the ability of our member agents to capture more leads and close more business."

David Liniger, chairman of RE/MAX, said that 2005 was the best year he has ever seen and anticipates that this year will see a mild correction in both home prices and sales. He still predicts that 2006 will be second-best to 2005 for sales.

About The Author
Monte Helme is a national public relations consultant with HouseHunt, Inc. Previously, he was vice president of public relations and publications for Century 21 Real Estate Corp.; vice president of communications for AmeriNet Financial Services (now LendingTree); assistant city editor/Orange County for the Los Angeles Times; executive sports editor of the Rockford, IL, Morning Star and Register-Republic; and reporter for the Dixon, IL, Evening-Telegraph. Find real estate and homes for sale through public MLS and by visiting websites: and powered by HouseHunt, Inc.

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