NAR: Home Sales To Rise Gradually Into 2008

A steady improvement in existing-home sales will support price appreciation moving forward, says NAR Chief Economist David Lereah.
REALTOR® Magazine Online
After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turn around by summer, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.

Annual totals for existing-home sales in 2007 will be comparable to 2006, says David Lereah, NAR’s chief economist.

“Keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation,” Lereah said. “We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it’ll be pretty much of a wash in terms of annual totals.”

The good news, he says, is that a steady improvement in sales will support price appreciation moving forward.

2006 Sales Third-Highest on Record

Existing-home sales for 2006 are expected to come in at 6.50 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.

Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade. Builders are pulling back on new construction to support prices of remaining inventory.

The 30-year fixed-rate mortgage will probably rise to 6.7 percent by the fourth quarter of 2007. Last week, Freddie Mac reported the 30-year fixed rate at 6.18 percent, far below earlier consensus forecasts.

“The current interest rate environment and housing inventory levels present a window of opportunity for potential buyers,” Lereah says.

The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300. The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3.0 percent in 2007 to $248,900.

Soft Landing for Housing

“With all the wild projections by academics, Wall Street analysts, and others in the media, it appears that much of the housing sector is experiencing a soft landing,” Lereah says. “Despite the doomsayers, household wealth will not evaporate and the economy will not go into a recession. If you’re in it for the long haul, housing is a sound investment.”

The unemployment rate is likely to average 4.8 percent in 2007, following a rate of 4.6 percent in 2006. Inflation, as measured by the Consumer Price Index, is expected to be 2.2 percent 2007, down from 3.2 percent last year, while growth in the U.S. gross domestic product is seen at 2.5 percent in 2007, compared with 3.3 percent last year.

Inflation-adjusted disposable personal income should grow 3.4 percent this year, following a rise of 2.7 percent in 2006.
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How to Cut Your Property Taxes; IRAs for Home Purchases

As many as 60% of homes are assessed for too much, and about 33% of property-tax appeals succeed. We offer tips on how to lower your load. Plus, whether an IRA can be used to pay off a mortgage.
By: Kimberly Lankford: The Wall Street Journal Online
Question: The rural county where I live has just reassessed real estate values, and my home's assessment more than tripled, as did most others in the country. The assessed value is now more than my most recent property appraisal. Should I appeal? What information would I have to present?

Answer: Go for it. As many as 60% of homes are assessed for too much, estimates Pete Sepp, of the National Taxpayers Union, and about 33% of property-tax appeals succeed.

Procedures vary, but you generally have 30 to 60 days after receiving an assessment notice to file an appeal. Ask the assessor's office for a copy of your property card, which documents the information on which the assessment was based. If the card lists the wrong number of rooms or square footage, for example, you may be able to get your assessment changed without a formal appeal.

If the information is accurate, go to Zillow.com to see how your home's assessment stacks up against others in your neighborhood. If you find that similar homes are assessed at a lower value, you may have a strong case.

If you spot big discrepancies, check your local assessor's office's records for more details on homes with similar features and lower assessments. Or find comparable assessments and explain why your home's value should be lower, says Sepp, whose organization publishes the helpful brochure How to Fight Property Taxes ($6.95). Some jurisdictions also allow you to submit as evidence market-value information, such as your recent appraisal.

Question: My wife and I just bought our first house. Within a week after closing, we found out that you can use your IRA toward a first-time home purchase, and each person can withdraw $10,000 toward "qualified acquisition costs." We have an 80-10-10 mortgage (80% from the first mortgage, 10% second mortgage, 10% down). Can each of use withdraw $10,000 from our IRAs without paying a penalty if we put the money toward paying off the second mortgage?

Answer: Good idea, but the answer is no. You can't take an IRA distribution to pay off any mortgage, regardless of whether it's a first or a second loan.

First-time home buyers (which the IRS defines as anyone who hasn't owned a house within the past two years) can avoid the 10% early-withdrawal penalty only if they use the IRA money to pay qualified acquisition costs for a principal residence before the end of the 120th day after withdrawing the money.

Qualified expenses include acquiring, constructing or rebuilding a residence. Closing costs are covered, but paying off a loan isn't, says Greg Rosica, a tax partner with Ernst & Young. Nor can you withdraw the money after the fact and treat the distribution as though the cash had been used for the down payment you've already made, says Bob D. Scharin of Thomson Tax & Accounting.

For more information about rules for IRA withdrawals, see IRS Publication 590, Individual Retirement Arrangements.
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Developers Now Required To Post Project Descriptions At Work Sites

LOS ANGELES - Beginning Tuesday, developers will be required to post a brief project description and other information at all construction sites in Los Angeles.
nbc4.tv
The initiative is aimed at reducing noise and enforcing rules at job sites to minimize disruptions sometimes caused during construction projects.

"At some time in our lives, we've all been inconvenienced by the noise, dust and traffic delays caused by construction in residential areas," Mayor Antonio Villaraigosa said Friday.

"This new ordinance will step up enforcement of these disturbances and encourage good relationships between residents and builders."

The ordinance will require developers to:

    • avoid street closures during peak traffic hours
    • park construction vehicles on-site, rather than on residential streets
    • ensure safe pedestrian access
    • promptly clean-up and spills or construction debris
    • avoid interfering with trash pick-ups

Councilman Jack Weiss introduced the "Good Neighbor Posting Initiative."

"This construction doesn't have to disrupt otherwise peaceful neighborhoods if developers and builders are good neighbors," he said last week. "By informing builders and residents about the rules, I hope we can reduce nuisances during construction and ensure that city laws are followed."
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Home prices climb in county

L.A. County home prices rise to record.
By: Annette Haddad: latimes.com
The L.A. median rises 6.5% in December from a year earlier despite a 12.9% drop in sales.

Don't talk to Brandon Brennan about it being a buyer's market for real estate.

Despite a widespread slowdown in sales, Brennan made bids on four Westchester houses — all below asking price — and was rebuffed by sellers waiting for a better offer.

"I didn't feel like it was a good time to pay full price for a house," said Brennan, relocating from Ventura because of a job transfer. "But with every offer, the sellers didn't bother to counter because they were getting other offers."

Such was the housing market at the end of 2006: Although Los Angeles County's median home price rose 6.5% from the previous year to reach a record $522,000 in December, the number of sales fell 12.9%.

"What we're seeing is a market that is rebalancing itself after the surge we had," said John Karevoll, chief analyst for DataQuick Information Systems, the La Jolla research firm that compiles monthly numbers. "The question, as we come off the top, is how far off the top we're likely to come."

As real estate agents like to say, homes that are selling these days are those that are "priced right" — at or slightly below the prevailing market rate. That means there can still be competition for certain houses in certain neighborhoods — as Brennan found.

Meanwhile, the majority of houses sit. The average days on the market for existing homes in L.A. County rose 5% from November to December to 104 days, according to multiple-listing service figures compiled by brokerage ZipRealty Inc. In the same period, the number of homes on the market declined 14% to 32,363.

"Buyers are going after the same few homes, the low-hanging fruit that are the good deals," said Michael Davin, executive vice president of CataList Homes, a Hermosa Beach-based brokerage.

The transactions that were completed in December closed at slightly higher prices, allowing L.A. County to recover appreciation lost in the previous five months. The December median price of $522,000 was up 2.4% from November's $510,000 and was the highest since the previous record of $520,000 set in July.

The median price is the point at which half of all homes sell for less, half for more.

For the full year, Los Angeles County's median home price rose 8.5% in 2006, while sales fell 16.8% compared with 2005. Price appreciation for the county peaked in 2003, when the year-over-year median price rose 24% from the previous year.

Throughout 2006, price appreciation slowed considerably from the double-digit gains logged in the previous three years as sales exploded. Karevoll said he expected price growth to continue to "bounce around" in the coming year — rising year over year one month, decelerating the next — as sales return to a more normal pace.

One trend Davin of CataList Homes has noticed in the last 45 days is the rise in the number of pending home sales that are subject to the buyer selling an existing home.

"A lot more homes in escrow are contingent on the sale of the down-leg property," he said. "There are fewer first-time buyers now because of the high prices. They realize they won't be making the same great appreciation."

December is typically one of the strongest months for real estate activity as buyers and sellers work to close deals before the end of the year, usually for tax or other bookkeeping reasons. That trend was particularly evident in the new-home category last month as sales rose 1.7% from the year before and the median increased 14.8% to $511,000, DataQuick said.

First-time buyer Dennis Hsii found more of a buyer's market when he was ready to purchase a new home late last year.

Hsii, 28, who works in technology, was able to negotiate with builder Standard Pacific Corp. to get a discount on a condominium under construction in Playa Vista that was listed in the mid-$700,000s.

He also received $20,000 in incentives to put toward upgrades, homeowners dues or mortgage costs.

His home was supposed to be ready in mid-December, but construction delays have pushed back his move-in date to February. In the meantime, the builder has given him an additional $4,000 to defray living expenses.

"I'm not disappointed," Hsii said. "But I'm eager to move in. It's a big deal being a new homeowner."

Brennan, the Westchester house hunter, and his wife, Christina, eventually had an offer accepted on a fixer-upper that had been reduced to $799,000, in part because they were willing to close within two weeks. They wound up paying about 2% below the asking price, but that was still more than they had hoped to spend.

"We went through a major ordeal," Brennan said, "trying to find a decent deal."

Data for other regions of Southern California are expected today.


*

(INFOBOX BELOW)


Home sales

Median price and number of homes sold in L.A. County

Sale prices Year-over-year
(In thousands) Dec. '05 Nov. '06 Dec. '06 Chng.
Resale houses $520 $540 $550 +5.8%
Resale condos $400 $410 $412 +3.0
New homes $445 $483 $511 +14.8
All combined $490 $510 $522 +6.5
Number of sales
Resale houses 6,276 5,167 5,405 –13.9
Resale condos 1,542 1,277 1,254 –18.7
New homes 1,027 907 1,044 +1.7
All combined 8,845 7,351 7,703 –12.9


Source: DataQuick Information Systems
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Blueprint for home sale: Price it right

Preparing to sell in 2007
By: Dian Hymer: Inman News
The current market value of your home may be more than, less than or the same as it was last year depending on where you live and what you have to sell. Nationally, the median sale price of homes sold in October 2006 dipped 3.5 percent from October 2005, which was an exceptionally strong month. But there are still pockets of the market, such as Portland, Ore., where prices are still going up.

Recently, a San Francisco home seller was relieved to close the sale of her condo after six months on the market - a market that was flooded with condo listings. Across the bay in the trendy Upper Rockridge neighborhood of Oakland, a listing sold in less than one week with two offers, both for significantly more than the asking price. But, there was nothing else on the market to compete with this listing.

HOME SELLER TIP: Regardless of whether you're in an area with a surplus of unsold inventory or one where listings are in demand, the blueprint for a successful sale in 2007 is the same. Price your home right for the market. Properly prepare your home for sale. And, make sure that your listing receives extensive market exposure.

Overpricing will get you nowhere in the current market. Buyers have been barraged by negative press on the housing market; they are cautious and won't pay a penny over market value. They aren't in a hurry. The threat of the market escalating in the near future is slim in most areas so buyers are holding out for value.

Sellers often wonder whether it's worth it to spend money fixing a home up for sale, especially if they aren't looking at selling for a huge profit. It's not only worth it, but also can be critical to a sale for the highest price possible, particularly in areas where the inventory is high. In some areas, resale homes are in competition with brand-new homes.

When there is a lot to choose from, buyers can afford to be picky. If your home has a dated décor you may need to invest in replacing items such as outmoded light fixtures, floor coverings and paint colors. Also, plan on correcting deferred maintenance, or discount your price accordingly.

Imagine that you're the buyer and have a choice between a house that you can move into without lifting a finger and one that needs a complete overhaul. Most buyers won't even consider the house that needs a facelift.

Be sure to select an agent that will promote your home on the Internet as well as to the local community. The Internet is the most important venue for residential real estate advertising. Realtor.com is the most comprehensive Internet site. Buyers in all price ranges, even multimillion-dollar buyers, use Realtor.com to search for new listings.

Although Realtor.com is the best in terms of reach, the limit on photos per listing is six. However, your agent can link a visual tour to your home's listing on Realtor.com for more effective marketing. Check your agent's advertising copy before it goes live to make sure it's accurate and includes the features you like best about the house.

Home-sale activity is affected by supply and demand dynamics in the local marketplace. For this reason, it may be beneficial to plan on marketing your home early in 2007. Inventories of homes for sale tend to rise in the late spring and summer months. Another factor that could work in favor of early-bird sellers is interest rates.

THE CLOSING: Interest rates continue to be at historically low levels but are expected to rise later in the year.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
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Single Women Take No. 2 Spot in Home Market

Laurie Minchew has been in her new home for only about a week.
RISMedia
But the 35-year-old single woman says she made the right decision to buy the three-bedroom house in Red Oak, Texas. The appeal was both the lifestyle and investment potential of homeownership.

"It was about 50-50," says Minchew, who was previously living with a friend. "It's still all very new for me, but I like it."

The latest housing industry surveys show that single women are the fastest-growing segment of home buyers-now second only to married couples. They account for nearly one in four home buyers and purchase houses at more than twice the rate of single men.

Researchers say it's a combination of social changes and finances that's causing the increase.

"More women are simply living alone-either never married or formerly married-and are much more active in career paths earning more money than ever before," says James Gaines, an economist with Texas A&M University's Real Estate Center.

Gaines says it is also "no secret that for the past five years or better, homeownership has been a very desirable investment position."

He also points out that "historically, this was a small group in terms of homeownership, so any increase will look large in percentage terms."

Over the last 10 years, single female buyers have been the fastest-growing segment of the housing market, according to surveys by the National Association of Realtors.

In 2006, they made up about 22% of home buyers, compared with 14% in 1995, Realtors' research shows. At the same time, the number of married couples in the market has fallen by almost 10 percentage points to 61%, and single male buyers have remained unchanged at about 9%.

Whatever the reason, home builders are catching on to the shift in the market.
"We are looking for opportunities to address this market," says builder Steve Wall, who sold Minchew her home. "Having products that address each of the buyer groups is important."

"There was a time when you had a one-size-fits-all mentality," Wall says. "We have to give people what they want, not what we want to build."

Real estate agents are also refocusing efforts to attract single female buyers at a time when the overall housing market is a bit soft.

"I've had a lot of female buyers this year," says Kim Fowler, with David Griffin & Co. Realtors. "My average age of the five or so single women I have sold to this year has been about 28."

Fowler just sold a two-bedroom condo in Oak Lawn to Laurie Self, who's in her mid-30s.
"The rent just went way up at my apartment-that was part of my motivation," Self says. "Mortgage rates are good now, and it's a buyer's market."

"I saw how real estate prices were going up like crazy," she says. "I can flip it in a few years and have some equity."

It isn't just builders and home sellers who've seen an uptick in single female customers.
"We have had a lot more single-female renters than we initially thought downtown," says Ted Hamilton, with Hamilton Properties, which has successfully converted several downtown office buildings into rental housing.

Hamilton estimates that about 40% of his single renters are women and that many of them like the security aspect of the buildings.

The turnaround in the central business district has also caught the attention of these renters, he says.

"The more vibrant downtown gets, the more appealing it will be to single females."
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Some like it haute

Watch out, Melrose. Picfair Village is on its way to becoming L.A.'s next trendy place to live and play.
By: Jessica C. Lee: latimes.com
Watch out, Melrose. Move over, Robertson. The Mid-City West neighborhood of Picfair Village — once rarely garnering a second look — is on its way to becoming L.A.'s next trendy place to live and play.

Beginnings

By 1922, the Santa Monica Land and Water Co. had developed the area into a residential community called Pico Boulevard Heights and lauded it as "the New Wilshire ... [and] a delightful place for a home," according to the neighborhood association website.

Although various communities in Los Angeles had covenants determining who could and could not live there, Picfair Village was accessible to minorities and attracted many Jewish and African American residents.

Picfair Village, a part of L.A.'s Mid-City West district, is south of Pico Boulevard, north of Venice Boulevard, west of Hauser Boulevard and east of Fairfax Avenue — hence its name, derived from Pico and Fairfax.

What it's about

In November 2004, Picfair Village was named one of Los Angeles Magazine's "10 Most Overlooked Neighborhoods in Los Angeles." Less than a decade ago, auto-body shops and vacant retail spaces lined Pico. But residents say those days are over.

According to the Picfair Village Community Assn., Pico has undergone a renaissance over the last five years. "There's a movement of more boutique business in the area, and I see it improving [Picfair Village] positively," said Alissa Solomon, an agent with Prudential California Realty's John Aaroe division.

With high-end clothing stores such as the Pinky Rose Boutique and organic cuisine at Bloom Café, Solomon said that Picfair Village could easily become the next Melrose Avenue or Robertson Boulevard.

The annual Picfair Village Street Fair has given a shot of life to the community as well. The August event is celebrated with food, live music and dancing.

Insiders' view

"People stay here a long time. It's not the kind of place where people move in and leave," said 13-year resident Diane Isaacs. Isaacs added that the improvements in the area contribute to that "staying-put" attitude.

She said she was initially drawn to Picfair Village because of its proximity to the Santa Monica Freeway and major arteries including Fairfax and Pico, but she also cherishes its cohesive atmosphere.

Sydney Stinette, who's lived in Picfair Village since 1978, says she finds comfort in knowing her neighbors on a first-name basis.

"I actually speak to my neighbors," she said. "It's just the most wonderful feeling."

Good news, bad news

Police say crime in the community, which has its share of gang-related tagging, has decreased over the last five years.

More negatives? Well, there's nothing quite like old sycamore trees to give streets a majestic feel, but the roots of the ones in Picfair Village are wreaking havoc on sidewalks, causing cracks and making them difficult to walk across.

And finding parking for guests can be a bear along the many permit-only streets.

Housing stock

Most of the homes were built in the 1920s and 1930s and are Spanish Colonial Revival, English Cottage and traditional in style. Houses range from 1,200 to 1,800 square feet and typically have two to three bedrooms and one to two bathrooms.

One downside to some of these homes is fireplaces that are in need of a new foundation due to the high levels of lime used in their construction.

On the market now is an 864-square-foot traditional-style home priced at $675,000. Built in 1927, it has two bedrooms, one bathroom, a remodeled kitchen with stainless-steel appliances and a new gas fireplace.

A 1,928-square-foot Spanish-style home built in 1935 is listed at $799,000. This home has three bedrooms, two bathrooms, a den and hardwood floors.

For $849,000, home seekers can purchase a completely renovated, 1,656-square-foot traditional-style house. Built in 1937, this home has three bedrooms, two bathrooms and is gated.

Report card

Picfair Village is served by the L.A. Unified School District. Many residents seek to enroll their kids at Mid-City Magnet School for kindergarten through eighth grade. The school scored 723 out of 1,000 on the 2006 Academic Performance Index Growth Report. Children from kindergarten through the fifth grade also attend Saturn Elementary, which scored 676. Mount Vernon Middle School and Los Angeles Senior High scored 578 and 523, respectively.
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Consumer Confidence Kicks Off High in 2007

U.S. consumer confidence jumps to its highest point since February 2006, which could signal good news for the housing market.
By: Jeannine Aversa: REALTOR® Magazine Online
Consumers are greeting the new year with a lot more confidence than they’ve had in months, which could be good news for the housing market.

The RBC Cash Index, created by the international polling firm Ipsos, showed U.S. consumer confidence at 95.3 in January. That was up from 86.9 in December and was at its highest since February of 2006.

The "expectations" index soared to 83.8 in January from 55 in December. This reading was at its highest in more than two years.

Consumers continue to feel particularly good about the job market. The January reading came in at 126.3, virtually unchanged from December's 126.5, the highest on record.

"A lot of the fears people had about the economy seem to be dissipating — fears about inflation and soaring gas prices. Fears about higher interest rates and the housing bust," says Mark Vitner, an economist at Wachovia Corp.
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Home Prices Expected to Rise, Sales to Drop Slightly in 2007

The number of homes sold will decline less sharply this year than last year, while price appreciation will gain steam. The median sales price for existing homes is predicted to reach $225,300 nationally.
By: Campion Walsh: The Wall Street Journal Online
U.S. home sales will decline less sharply this year than they did last year, while home-price appreciation is expected to gain steam, the National Association of Realtors said.

In its latest forecast, the NAR said sales of existing homes are likely to decline about 1.2% this year to 6.42 million, following a sharp drop last year, while sales of new homes are seen falling about 9.7% to 957,000.

Because the market is starting this year at a relatively low point, even a gradual recovery of sales during the year would mean that annual totals for 2007 are likely to show no substantial improvement, according to NAR Chief Economist David Lereah.

"The good news is that the steady improvement in sales will support price appreciation moving forward," Mr. Lereah says.

The Realtors' group, which is running a $40 million ad campaign designed to encourage consumers to contact their local realtors, expects moderate price increases this year. The group forecasts the median sales price for existing homes to grow 1.5% nationally to $225,300, following last year's estimated 1.1% rise. The national median price for new homes will increase 3% this year to $248,900, according to the NAR, after estimated growth of 0.3% last year.

As builders rein in new projects to support prices, housing starts are expected to drop 16.6% this year to 1.51 million, their lowest level in a decade, the NAR said.

Mortgage Bankers Association chief economist Doug Duncan expects home prices to rise 1% to 2% annually for the next couple of years. But some markets could see price declines of 10% to 20% this year, he says, a shift from the last four to five years, when there were "almost no markets where prices were declining."

Home sales will decline 7% to 8% this year, with most of the decline in the first half, adds Mr. Duncan, who expects the market to bottom out in mid- to late 2007.

Meanwhile, the volume of mortgage applications filed with major U.S. banks rose 16.6% on a seasonally adjusted basis last week, compared with the week before, the MBA reported yesterday.

The number of applications - for both purchases and refinancings - increased 12%, compared with the same period a year earlier. Application volumes, on a seasonally adjusted basis, fell about 14% just before the holidays.

Applications for loans to buy homes stood at the highest level in nearly a year, according to the MBA. Applications to refinance rose about 28% from a year ago.

The average rate for a 30-year fixed-rate loan fell to 6.13% from 6.22% the previous week, which was the highest rate seen in eight weeks. The average rate for a 15-year fixed-rate mortgage dropped to 5.85% from 5.93% the previous week. The rate for a one-year adjustable-rate mortgage, or ARM, averaged 5.79%, down from 5.84% the previous week, the MBA's data showed.
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The Weekend Guide! January 11 - January 14, 2007

The Weekend Guide for January 11 - January 14, 2007.
Full Article:
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National data shows steady home sales will continue

Pending Home Sales Show Steady Trend
CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)
The decline in pending home sales from year ago levels continues to narrow, a sign that market stabilization will continue in the months ahead, according to a recent report from NAR. The Association's Pending Home Sales Index (PHSI), which gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed, stood at 107.0 in November. A PHSI of 100 or more generally indicates a high level of home sales activity. Over the last five months, year-to-year declines in the PHSI have gradually fallen from 16 percent in July to 11.4 percent in November.

"Because there is a stronger parallel between changes in the index from a year ago and the actual pace of home sales in coming months, the index is pointing toward fairly stable home sales in the near future," said NAR Chief Economist David Lereah. "That is another indicator that home sales likely bottomed-out in September."

The PHSI declined across the nation in November compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it declined 8.9 percent to 121.6. In the West, the index fell 15.9 percent to 106.6. The PHSI also declined in the Midwest and Northeast regions, falling to 101.7 and 85.5, respectively.

A stabilization trend in the housing market is likely to continue, according to the latest reading on pending home sales published by the National Association of Realtors®.

The Pending Home Sales Index,* based on contracts signed in November, eased by 0.5 percent to 107.0 from an upwardly revised reading of 107.5 in October, and is 11.4 percent lower than November 2005. The decline from year-ago levels has been steadily narrowing since July, which was 16.0 percent lower than the same month in 2005.

David Lereah, NAR’s chief economist, said the narrowing from year-ago levels is a significant factor. “Because there is a stronger parallel between changes in the index from a year ago and the actual pace of home sales in coming months, the index is pointing toward fairly stable home sales in the near future,” he said. “That is another indicator that home sales likely bottomed-out in September.”

The index is derived from pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed; pending sales typically are finalized within one or two months of signing.

An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales. There is a closer relationship between annual changes in the index and actual market performance than with month-to-month comparisons.

“Although some monthly declines are possible, when we look at the forecast for existing-home sales in 2007 on a quarterly basis, we see gradual improvement over the course of the year,” Lereah said. “That will support future price appreciation as inventories are drawn down.”

Regionally, the PHSI in the Midwest rose 4.8 percent in November to 101.7 but was 11.6 percent below a year ago. The index in the South slipped 1.1 percent to 121.6 and was 8.9 percent below November 2005. The index in the West declined 2.6 percent to 106.6 and was 15.9 percent lower than a year earlier. In the Northeast, the index was down 2.8 percent in November to 85.5 and was 9.6 percent below November 2005.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.


* The Pending Home Sales Index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer parallel between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than there is with month-to-month comparisons.

The forecast will be revised January 10, and existing-home sales for December will be released January 25. The next Pending Home Sale for December will be released January 25. The next Pending Home Sales Index will be on February 1.
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Property Owners OK East Hollywood BID

Property owners in East Hollywood voted on Tuesday to support the creation of a Business Improvement District.
By: DANIEL MILLER: Los Angeles Business Journal Online
The owners represent most of the square footage within the district. The vote took place at L.A. City Hall and sends the matter to the full council for a vote Wednesday.

The proposed district, which includes 85 property owners, needed the support of stakeholders representing 51 percent of the square footage in the area to move forward. The Hollywood Chamber of Commerce, which will assist the BID, expects the council to approve the district, paving the way for Mayor Antonio Villaraigosa to sign off on it.

“This gives us a chance to pull stakeholders together so they are talking and we can deal with issues that are important over there,” said chamber President Leron Gubler. The BID will have an annual budget of $89,000 and will mostly address maintenance issues in the area. The goal is to address the area’s “general run down appearance,” Gubler said.

The BID will provide services to the area between Vermont Avenue and Edgemont Street in East Hollywood. Major facilities in the area, including the Braille Institute and the Kaiser Permanente Hospital, support the BID.

Pending final approvals, the BID will be formed in the spring. There are three other Hollywood BIDs.
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TV, Radio Ads Urge Consumers to Call a REALTOR®

The $40 million campaign kicks off on Jan. 15 and explains how REALTORS® can help buyers and sellers navigate today's real estate market.
REALTOR® Magazine Online
A new $40 million television and radio campaign that explains the opportunities, challenges, and advantages of buying and selling a home in today’s market will kick off on Jan. 15.

The commercials are the latest installment in the association's long-running Public Awareness Campaign. They stress that all real estate markets are local, and urge consumers who are thinking about buying or selling to contact a REALTOR® to learn about the conditions in their community.

“Many media reports about trends and developments in the housing market are on a national level and don’t capture what’s happening in individual communities across the country,” NAR President Pat Vredevoogd Combs said at a press conference on Tuesday. “As local real estate market conditions continue to evolve, savvy consumers rely on the guidance of real estate professionals who are immersed in the industry.”

When Experience Matters

The new advertising initiative, “Every market’s different, call a REALTOR® today,” explains the value of REALTORS®’ experience and insight into their local markets.

With a national median appreciation rate of more than 50 percent over the past six years, followed by a slowdown in sales in some markets, buyers may be worried about the timing of their investment. With more homes on the market, however, many buyers have increased negotiating power. A REALTOR® can help them structure the best deal.

On the flip side, sellers need help positioning their home in a competitive marketplace and in attracting and engaging serious buyers.

“Home ownership is a safe, secure way to build long-term wealth,” Combs said. “Buyers and sellers have different concerns as their local markets change, but our REALTOR® members handle hundreds, if not thousands, of real estate transactions over the course of their careers and can counsel and guide consumers through the process.”

Expands on Print Media Campaign

The television and radio ads that will begin running on Jan. 15 and Jan. 29, respectively, expand on a print media campaign that NAR launched in October 2006. That campaign was titled: “It’s a Great Time to Buy or Sell a Home.”

Now in its 10th year, the NAR Public Awareness Campaign has helped millions of consumers realize the value of using a REALTOR® to help them buy or sell real estate. And according to annual tracking research, the commercials are making a big impact. The percentage of consumers surveyed who are more likely to hire a REALTOR® than a real estate agent who is not a REALTOR® has risen from 51 percent in 1999 (the first year of the survey) to 64 percent in 2006.

The 2007 campaign includes two themes:

    • “Good Time to Buy” highlights favorable conditions for home buyers and
      explains how a REALTOR® can help buyers make smart decisions in their local
      marketplace.

    • “Know How to Sell” explains how REALTORS® can help sellers position their
      homes in a competitive marketplace to attract and engage serious buyers.

Ads Run Through November

This year marks the most extensive outreach effort since the Public Awareness Campaign began. Ads will be broadcast nationwide from January through November and will air more than 8,750 times on national TV and radio outlets and more than 25,000 times on local radio stations through a national buy.

Print, billboard, bus shelter, and poster ads are available to local and state associations to use in their own outreach efforts, and REALTORS® can download Web banners for their own Web sites.

“In some parts of the country, it may be the best time to buy a home since 2001,” Combs said. “But real estate is cyclical. Home buyers should act before their window of opportunity closes, and sellers need to think about how to prepare and market their home effectively.”
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What to Know Before Buying a Fixer-Upper

Consider location, price, and the huge amount of time and effort involved when buying a home that needs big improvements.
By: Kathy Haight: REALTOR® Magazine Online
A home in need of repair can be a good deal, especially if buyers are able to do some of the repairs themselves.

Here are three major things to think about when considering a home in need of lots of improvements:

• Location, location location. Is the lot well located with good topography? Will the improvements you propose make it worth as much as — not a lot more — than other homes in the neighborhood?

• How much? Calculate what the home would sell for if it were in great shape. Subtract the cost of repairs, then take off another 10 to 15 percent for unexpected problems. If you can’t get the property for that, then it's probably a bad deal.

• Prepare for the mess. Get ready for renovations to take longer than expected. Know that your life will be disrupted if you can’t afford to live somewhere else while the work is being completed.

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