If you're new here, you may want to subscribe to our RSS feed. Thanks for visiting!

“Price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans,” said Lawrence Yun, National Association of Realtors chief economist. Yun also noted that while most markets are experiencing a significant reduction in contract signing from the previous year, others have seen a doubling in home sales.

The NAR is predicting a recovery in sales in the second half of the year based on the Pending Home Sales Index (PHSI). The forward-looking indicator is derived from contracts signed in May, which decreased 4.7 percent to 84.7 from a revised reading of 88.9 in April. In May of 2007, the index stood 14 points higher at 98.5 percent, than in May 2008.

Yun warns that a sharp increase in pending home sales will likely have some pullback in the following month. Yun also stated, “The overall decline in contract signings suggests that we are not out of the woods by any means.”

Existing home sales are expected to grow from the second quarter figures annual pace of 5.01 million, to 5.75 million in the fourth quarter of the year, according to the NAR. The expected total existing home sales for all of 2008 is 5.31 million, and an increase of 5 percent, to 5.58 million, is expected for 2009.

New home sales nationwide are likely going to fall to 525,000 in 2008, a decrease of 32.3 percent from 2007, and decline to 507,000 in 2009, dropping another 3.4 percent. Housing starts are also expected to decrease 28.7 percent to 966,000 throughout 2008, and another 9 percent to 879,000 in 2009.