NAR predicts rise in national existing-home sales

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Total existing-home sales are expected to rise in 35 states in 2001 compared to last year, with 21 states, concentrated in the West and South, setting new annual records. At the same time, the median existing-home price will rise in 110 of the 113 metropolitan areas forecast, according to new projections by the National Association of Realtors.|ret||ret||tab|

NAR's first state-level forecasts, to be released on a quarterly basis, also include projections for other housing and economic data, which are components in developing the individual state forecast models for total home resale activity (single-family, condo and co-op), and select metropolitan statistical area median existing-home price projections, according to an Oct. 16 release from NAR.|ret||ret||tab|

David Lereah, NAR's chief economist, said most of the sales activity took place in the first half of the year. "Home sales were exceptionally strong in the first half of the year, and some deceleration is expected for the remainder of the year in the wake of the September 11 attacks, but sales remain historically strong. Assuming there are no major surprises, we can look forward to improvement around the second quarter of 2002 as the economy recovers," he said.|ret||ret||tab|

Single-family home prices this year will rise the fastest in California, Florida and high-density cities in the Northeast. "Supply and demand are at play in most of these markets based on available supply and new homes coming on the market versus employment gains, which is driving demand," Lereah said.|ret||ret||tab|

The strongest increase in total existing-home sales in 2001 will be in Nevada, where sales will be 25 percent above 2000, followed by Alaska, increasing 23.4 percent, and New Mexico, where home resales will rise 20.5 percent. Montana, Wyoming and Oklahoma also are seeing strong gains. "These states are having strong sales because they didn't experience a deceleration in job gains during the current economic slowdown," Lereah said.|ret||ret||tab|

Other states with strong increases include Mississippi, Oregon and South Carolina. "In these states, there is a pent-up demand for housing from population gains or from an undersupply of housing in earlier years," Lereah said. "Other fast growing states, such as Colorado and Florida, will have a small increase in home sales this year due to exceptionally strong activity in those states during 2000," he added.|ret||ret||tab|

NAR reports the tourist states of Florida, Nevada and Hawaii will have record sales this year given strong activity to date, even though tourism will be down in the months ahead.|ret||ret||tab|

Lereah said home prices this year are increasing faster than historic norms in about half of the areas forecast, with a persistence of relatively low inventories of homes available for sale in many markets. |ret||ret||tab|

"We expect 56 metropolitan areas to experience total-year price increases above historic norms, while eight areas will increase at double-digit rates," he said. NAR considers price increases greater than two percentage points above the general rate of inflation to be above the historic norm, which is one to two points higher than the rate of consumer price inflation pegged at 3.1 percent for the year.|ret||ret||tab|

The strongest price increase will be in Sacramento, with a median existing-home price for all of 2001 forecast to rise 17.9 percent to a median $170,200, followed by Washington, D.C., up 12 percent to $203,700, and South Bend-Mishawaka, Ind., with a typical resale price of $91,300, increasing 11.5 percent from 2000.|ret||ret||tab|

Regionally, in the West the strongest existing-home sales increase after Nevada, Alaska and New Mexico will be in Montana, up 16.6 percent, followed by Oregon, rising 14 percent this year. Many Western states will set new home sales records this year in addition to Nevada and Hawaii, including Alaska, Arizona, Colorado, Montana, Oregon, Utah, Washington and Wyoming.|ret||ret||tab|

After Sacramento, the strongest price increase in the West will be in Denver, rising 11.3 percent to $218,100 this year, followed by Riverside-San Bernardino, Calif., up 10.9 percent to a median resale price of $153,700. Next is San Diego, increasing 10.4 percent to a typical price of $296,200 for 2001.|ret||ret||tab|

In the South, the strongest sales increase will be in Mississippi, where home resales will rise 14.2 percent, followed by South Carolina, increasing 10.4 percent, and Oklahoma, up 10 percent. In addition to Florida, new sales records can be expected this year in Georgia, Maryland, Mississippi, Okla-homa and South Carolina.|ret||ret||tab|

After the Washington, D.C., area, the strongest price increase in the South will be in Oklahoma City, up 10.9 percent to $94,600, followed by the Ft. Meyers-Cape Coral, Fla., area, up 10.6 percent to $112,900.|ret||ret||tab|

In the Midwest, Nebraska will have the strongest increase, up 9.9 percent, followed by Wisconsin, rising 8.4 percent, and North Dakota, with total resales 7.8 percent higher than 2000. New sales records will be set this year in Nebraska, Ohio and Wisconsin.|ret||ret||tab|

After South Bend-Mishawaka, Ind., the strongest price increase in the Midwest this year will be in the Lansing, Mich., area where the median price of $119,900 will rise 9.2 percent from 2000. The next highest increase will be in Kansas City, up 8.4 percent to a median of $136,600.|ret||ret||tab|

In the Northeast, the best sales performance will be in New York, where existing-home sales will rise 3.2 percent this year, followed by Rhode Island, up 1.9 percent; both of these states will set new records this year.|ret||ret||tab|

The strongest price increase in the Northeast will be in the Middlesex-Somerset-Hunterdon area of New Jersey, with a median resale price of $238,200, up 9.8 percent from 2000. Next is Nassau-Suffolk, N.Y., where the median price of $234,600 will be 9.7 percent above 2000, followed by Bergen-Passaic, N.J, expected to rise 9.5 percent to a typical resale price of $273,000.|ret||ret||tab|

NAR's new quarterly series of state forecasts include analysis of housing and economic conditions in each state, projections for total home-resale activity and percentage changes for 2001 and 2002, projections for other housing and economic data for the same years, and projections for select metropolitan area median existing-home prices and percentage changes for 2001 and 2002.[[In-content Ad]]