Home sales to recover in '08, group says; So. Fla. could take longer

A trade group for real estate agents predicted Tuesday that the pace of U.S. home sales will pick up significantly in the second half of 2008, bringing total sales for the year marginally higher than in 2007.

The monthly forecast from the National Association of Realtors calls for U.S. existing home sales to increase 0.9 percent this year to 5.7 million, up from a projected 5.65 million last year.

Final results for U.S. existing home sales in 2007 -- to be released later this month -- are expected to be down 12.7 percent from 6.48 million in 2006, the group said.

The group's forecast for 2008 was unchanged from last month. The trade group also forecast 5.91 million home sales in 2009.

Economists and analysts, however, are predicting far lower home sales and accuse the Realtors group of not painting an accurate picture of the housing market. Experts say home sales in South Florida will remain soft in 2008. They don't think the local housing market will begin to recover until 2009 or 2010.

``The exact timing and the strength of a home sales recovery is a bit uncertain,'' Lawrence Yun, the group's chief economist, said in a statement. ``A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.''

Numerous economists, however, are much more pessimistic about the housing market this year and are predicting far lower home sales.

In addition, the group did not anticipate 2007's severe housing market downturn. A year ago, it was predicting more than 6.4 million existing home sales -- about 760,000 more than actually happened.

The group is predicting the median price for existing homes in the U.S. will have dropped 1.9 percent in 2007 to $217,600 (euro147,977) _ the first annual drop since the trade group began tracking the data.

That number is projected to remain flat in 2008 before rising to $224,400 (euro152,601) in 2009. The median is the point at which half sell for more money and half sell for less.

The trade group also said its index that forecasts near-term home sales fell 2.6 percent in November from an upwardly revised October number.

The trade group's seasonally adjusted index of pending sales for existing homes fell to a reading of 87.6 from an upwardly revised October index of 89.9, but was down 19.2 percent from a year ago. The index hit a record low in September at the peak of the worldwide credit squeeze.

The Realtors group predicted new home sales would fall 13.4 percent this year to 669,000, down from a projected total of 773,000 in 2007. It forecast new home sales would rebound to 730,000 in 2009 and projected new home prices would be flat this year at $242,200 (euro164,706), before rising to $256,500 (euro174,430) in 2009.

Source : http://www.sun-sentinel.com/