David Lereah
David Lereah
David Lereah is the President of Reecon Advisors, Inc., a real estate advisory and information company located in the Washington, DC area. Lereah was previously an Executive Vice President at Move, Inc. and before that, Chief Economist for the National Association of Realtors. Lereah served as the NAR's spokesman on economic forecasts, interest rates, home sales, mortgage rates, as well as other policy issues and trends affecting the United States real estate industry. Lereah was also the Chief Economist for...
behavior commercial designed early economic estate major market modeling points provide relationship signals tool trends turning
Modeling a relationship between economic and commercial market indicators, as well as market trends and sentiment, will provide us with a new tool in assessing market behavior in the major commercial real estate sectors. It is being designed as an index to provide early signals of turning points between expansions and slowdowns in commercial real estate activity.
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A lot of demand has been met over the last five years, and a modest rise in mortgage interest rates is causing some market cooling.
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Some of the cooling is coming from non-boom markets such as Detroit, where there are job problems. I do worry about those markets if the economy continues to slow, though we do expect the economy to pick up in the first quarter.
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The underlying fundamentals of the housing market are solid and sales will stay historically strong, but they will trend modestly down from current peaks. Masked by the data are early signs that housing is starting to wind down from a boom and will transition into an expansion - in other words, a soft landing.
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These historically high home-price gains are the simple result of more buyers than sellers in the market. The good news is that the supply of homes on the market has been trending up and we are entering a period of a more normal balance in supply and demand.
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A modest slowdown in home sales, coupled with improvements in the housing inventory, means the market is in the process of normalization.
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Not only have mortgage interest rates declined, but an expected rise in the second half of the year will be slower than in earlier projections. As a result, we now expect to set records for both existing- and new-home sales this year.
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The nearby regions picked up a great deal of activity very quickly.
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So, 2005, when we look back, was the best year in housing in recent memory, probably of all time.
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This is the biggest annual home-price increase in any metro area on record.
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A new record is a bit unexpected, but so is the performance of mortgage interest rates which have been lower than forecast. When we look at recent job gains, we see all the positive factors coming together to coincide with a powerful demographic demand for housing.
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You're going to be taking away from Middle America. Everyone, whether you use the mortgage interest deduction or not, the value goes down. You've just reduced the retirement nest egg for everyone.
brakes hot tapping
The slowdown amounts to a tapping of the brakes on a hot market.
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Our definition of second homes has changed with the buyer shift toward investment property, ... In examining Census data to determine the number of investment units, we see that second homes are a much larger share than the conventional mind-set of them being mostly vacation homes.