On Monday, Barry Ritholtz posted that real estate has "begun to cool". Yesterday, the National Association of Realtors revealed that it is thinking somewhere along the same lines too.
Home sales are expected to trend down from record levels during the second half of this year, but easily set annual records for both new- and existing-home sales, according to the NATIONAL ASSOCIATION OF REALTORS®.
Existing-home sales are forecast to increase 2.9 percent to 6.98 million for 2005, while new-home sales are seen to rise 4.8 percent to 1.26 million this year. Total housing starts—single-family and multifamily—should grow by 3.2 percent to 2.02 million units in 2005, the highest since 1978; single-family starts are projected to set a record of 1.67 million.
David Lereah, NAR's chief economist, says home sales should be fairly stable in the near term. "The housing market is probably close to a peak right now in terms of sales activity, but there is tremendous momentum," he says. "Sales are expected to coast at historically high levels into next year, but they will trend slightly downward."...
House price inflation quite clearly has cooled in the UK, as Reuters reported.
Annual house price inflation in England and Wales weakened to its lowest rate in almost a decade in the second quarter, government data showed on Monday. The Land Registry said that house prices rose just 5.43 percent in the April-June period compared with a year ago, a sharp slowdown from the 10.27 percent rise reported for Q1. The number of properties sold in the second quarter fell by an annual 27.7 percent to 216,890, but this was a marked improvement from Q1, when turnover plummeted 35 percent on the year to 159,116...
The Office for the Deputy Prime Minister (ODPM) said house price inflation slowed to an annual 5.0 percent in June from 6.0 percent the month before...
The nation's big mortgage lenders have already reported on July house price inflation, which is down to its lowest level in nearly a decade...
In his post, Ritholtz also stuck his neck out to say: "We expect a recession in the 2006-07 time frame."
Possibly. So far, I have not seen enough weakness to indicate a recession in the near term, but a lot can happen in two years.
2 comments:
Actually, not such a stretch -- the last recession was 2000-01; Before that, 94 and then 90.
How risky is it suggesting recessions come along every 6 or 7 years ?
Barry,
Actually, I tend to agree with you. The risk of a recession is high. The risk in forecasting that there will be one is probably less so.
If anything, I thought the 2006-2007 time-frame a bit wide. I'm hoping to find a tighter forecast.
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