Economists Don't See Dramatic End to Boom

By: James R. Hagerty: REALTOR® Magazine Online
The housing boom is now peaking or will do so over the next year or so, according to many economists, who add that the boom is not likely end by a dramatic event.

While investors can cause stock prices to plunge by immediately unloading their stocks, it can take homeowners months to sell property. Previous housing busts in California, New England, and elsewhere indicate that homeowners pulled their dwellings off the market if they were unable to secure a desirable price; the historical patterns suggest that home sales plummet but that housing prices tend to fall slowly over several years.

Many economists believe there will be a modest decline in residential prices in some West and East coast cities that have hot markets, but a few market experts anticipate a sharp fall in prices across the country.