Nov. 1, 2007                                                                                                               

What are real estate professionals saying to homebuyers and sellers about current market conditions? Facts...LOCAL MARKET CONDITIONS. The successful brokers and sales associates are talking about the strengths that exist in the market not the negative media hype.
 Below are positive angles that appeared recently in the media and underscore why it is a good time to buy real estate.

Recent Quotes about the Positive Signs in the Real Estate Market:

Be Proud of Your Industry: Realtors Assist Residents Affected by Wildfires

Realogy announced the Realogy Charitable Foundation will distribute 100 percent of all funds raised by employees, agents, vendors and partners in support of the Southern California wildfires relief efforts underway by the Red Cross, Salvation Army and Direct Relief International.  The Realogy Charitable Foundation said it would match employee donations up to an aggregate $100,000.

-- Real Estate Intelligence Report, (subscription newsletter), Vol. 13, No. 43, Oct. 29, 2007

The National Association of Realtors donated $500,000 to assist victims of the Southern California wildfires and called upon its members to contribute to its Realtors Relief Foundation.

-- NAR announces $500,000 in wildfire assistance, Inman News (subscription required), October 25, 2007

Real Estate Commissions Rise

Many sellers believe they can sell their homes quicker by hiring the best salespeople, which comes with a premium. Some may have returned to full-commission brokers after trying unsuccessfully to sell their homes themselves. A year ago people were asking, 'If things are selling in two days, why should I deal with a full commission broker?' Now sellers want a professional to hold their hand.

-- Jim Long, real estate broker in upstate New York, Real Estate Commissions Rise, by Les Christie, CNNMoney.com, October 31, 2007

Owning a Home Why its Still the Best Long-Term Investment

Consumers and homeowners who are in it for the long-term are once again showing to come out well ahead. Because of the power of leveraging, $10,000 used for a down payment on a typically priced home in the U.S. at a typical home price appreciation of 5 percent will return $110,000 after 10 years. The same $10,000 invested in the stock market appreciating at 10% annual increases will result in $23,600. No wonder the data from the Federal Reserve show consistent results year-after-year of the staggering difference in net worth between homeowners and renters. A typical homeowner had $184,400 in net worth versus only $4,000 for a typical renter.

-- The Long View, by Lawrence Yun, vice president, National Association of Realtors Research, Real Estate Insights, October 2007

Mr. Holland also said a proposal by Buddy Cooper of Ocean King LLC would be coming up at the Aug. 20 council meeting. Mr. Cooper is proposing to close the end of East Boardwalk Drive and create an easement in order to allow for a parking deck for the proposed Ocean King condominium complex. Residents on East Boardwalk Drive have expressed opposition to closing the end of the street. Mr. Cooper said they hope to begin pre-sales of condo units in a year, and his architects should have construction documents ready in the next few months.

Not surprisingly, the National Association of Realtors' annual Investment and Vacation Home Buyers Survey showed that homes purchased for investment or perhaps speculation slowed in 2006, but eyebrows may bolt upwards upon hearing that second home purchases set a new record -- up from 2005, what many call the end of the so-called housing bubble. NAR says that second-home sales were mixed in 2006, with the combined total of vacation- and investment-home sales accounting for 36 percent of all existing and new residential transactions -- down from 40 percent of sales in 2005, according to the National Association of Realtors. It's surprising that the number isn't down even more, considering the steady drum beat playing up the softening of housing in the financial press. Investors tend to be buy and hold homebuyers who build equity over years, while speculators tend to be flippers who rely on a quickly appreciating housing market to get in with little invested and get out with a tidy gain in days or weeks. But market chicken littles have underestimated some key factors -- that federal and local government tax subsidies such as the Tax Relief Act of 1997; record immigration, both legal and illegal, and the aging baby-boomer population at the height of its earning power each are nicely fueling home sales, even if many markets are reporting less robust sales than their peaks of 2005. A record stock market may also influence the purchase of second homes. As people cash out stock gains, they may diversify into the real estate market. Already stories are beginning to appear in the financial press wondering if a 13,000 DOW can be sustained, or if the old axiom "sell in May, then go away" applies. With 20 major markets declining one percent in home values in the first quarter of 2007, according to the Standard & Poor's Case/Shiller home price index, speculators don't have market momentum to rely on for gains, leaving primary, second-home and investment homebuyers picking over home selections. Vacation-home sales rose 4.7 percent to a record 1.07 million in 2006 from 1.02 million in 2005, while investment-home sales fell sharply, down 28.9 percent to 1.65 million in 2006 from a record 2.32 million in 2005. By contrast, primary residence sales fell 4.1 percent to 4.82 million in 2006 from 5.02 million in 2005. Twenty-two percent of all homes purchased last year were for investment, down from a 28 percent market share in 2005, while another 14 percent were vacation homes, up from a 12 percent share in 2005, the survey found. Vacation-home buyers NAR reports the rise in vacation-home sales is based on demographic and lifestyle factors, with "only modest interest in renting their properties to others." However, that may be changing. NAR's survey showed that 18 percent of buyers purchase vacation homes for the purpose of renting to others, up from the 13 percent reported in last year's second home buyer's survey. "Many vacation home buyers do not initially intend to rent their second home, they choose to do so after a year or so of ownership, discovering they do not use the home as often as intended and it is more expensive than anticipated," suggests Eileen Buesing, spokesperson for HomeAway, Inc., an online vacation rental site. According to the survey, the typical vacation-home buyer in 2006 was 44 years old, had a median household income of $102,200, and purchased a property that was a median of 215 miles from their primary residence; 42 percent of vacation homes were closer than 100 miles and 32 percent were 500 miles or further. "The demographics favor vacation-home sales because large numbers of consumers are in the prime buying ages, and buyers want recreational property for personal use -- investment is a secondary consideration," Lereah said. Last year, in the 2005 second home buyer survey, NAR noted that there were 36.0 million people aged 50 to 59 in the United States, and the median age of vacation-home buyer was 52. However, Lereah said a larger group of people aged 40 to 49 in 2005 would be driving the market in the coming decade. "We see this happening now with 44.7 million people in their 40s, and the median age of vacation buyers has dropped close to the historical average, which is about 47." In listing the reasons for purchasing a vacation home, 79 percent of buyers wanted to use the home for vacation or as a family retreat; 34 percent to diversify investments; 28 percent to use as a primary residence in the future; 25 percent for the tax benefits; 22 percent for use by a family member, friend or relative; 21 percent because they had extra money to spend and 18 percent to rent to others. In terms of location, 29 percent of vacation homes were purchased in rural areas, 24 percent in resorts, 22 percent in a suburb and 10 percent in an urban area or central city. Sixty-seven percent were detached single-family homes, 21 percent condos, 8 percent townhouses or rowhouses, and 4 percent other. One-quarter of vacation homes were purchased in the Northeast, 13 percent in the Midwest, 38 percent in the South and 25 percent in the West. Investment-home buyers Investment-home buyers in 2005 were a median age of 39, earned an income of $90,250, and bought a home that was fairly close to their primary residence -- a median of 22 miles. When asked about the most important reasons for their purchase of an investment home, 46 percent said to provide rental income; 43 percent to diversify investments; 23 percent for tax benefits; 18 percent to use for vacations or as a family retreat; 15 percent because they had extra money to spend; 13 percent for use by a family member, friend or relative; and 12 percent to use as a primary residence in the future. Thirty-seven percent of investment homes are in a suburb, 22 percent a rural area, 18 percent urban or central city, and 7 percent in a resort area. Sixty-three percent are detached single-family homes, 26 percent condos, 6 percent townhouses or rowhouses, and 5 percent other. Twenty-four percent of investment properties were purchased in the Northeast, 17 percent in the Midwest, 39 percent in the South and 20 percent in the West. Twenty-five percent of vacation-home buyers paid cash for their property, as did 32 percent of investment buyers. Of special note, an unusually high number of respondents in this survey report purchasing new homes: 44 percent of vacation-home buyers and 36 percent of investment-home buyers. This follows a trend noted in NAR's 2006 Profile of Home Buyers & Sellers. Historically 20 percent of homes purchased are new. In 2006, that figure rose to over 22 percent. Seventy-eight percent of homebuyers buy an existing home, but those numbers could wane even more. A whopping 80 percent of existing homes were built before 1980. Yet, in 2005, according to the Office of Federal Housing Enterprise Oversight, 60 percent of homebuyers purchased homes that were 10 years old or less, suggesting a distinct preference by homebuyers for newer homes. The median price of a vacation home in 2006 was $200,000, down 2.0 percent from $204,100 in 2005. The typical investment property cost $150,000 last year, down 18.3 percent from $183,500 in 2005. "The drop in investment prices comes as no surprise, but for vacation-home prices to edge down in a record market is a bit puzzling," Lereah said. "It may result from a large dumping of inventory on the market by speculators, especially in the condo sector, with long-term, second-home buyers taking advantage of the glut and buying at negotiated discounts. This underscores that housing should always be viewed as a long-term investment, providing solid returns over time." "Anecdotally, part of the drop in the median investment price results from investors shifting away from pricier markets like Florida, Nevada and Arizona, and into affordable locations in New Mexico, Idaho, Utah, Georgia, Tennessee and the Carolinas," Lereah said. Vacation-home buyers plan to keep their property for a median of 10 years; 38 percent, the largest share of respondents, plan to keep their vacation home for 11 years or more. Investment buyers plan to hold their property for a median of five years, with 33 percent planning to keep for six years or more. Even with the cautions on speculative investment, 12 percent of investment buyers plan to sell in one year or less, although some may be adding value by renovating.

by Shannon Kemp

NEWS-TIMES

MOREHEAD CITY The County Public Water Access Committee took a step in favor of the proposed boat ramp on the Cedar Point side of the B. Cameron Langston Bridge.

The committee unanimously voted Thursday night to recommend that the County Board of Commissioners approve a resolution of support for the N.C. Wildlife Resource Commissions (WRC) proposal for a water access project at the northwest base of the bridge.

The vote, made during the regular meeting at the Morehead City Train Depot, included contingencies. County commissioners will consider the package Monday during a meeting at 6 p.m. in the administration building.

While the County Public Water Access Committee supports the WRC proposal for the boat ramp, its support is contingent upon a positive resolution between WRC and the N.C. Department of Transportation (DOT) on traffic safety issues concerning the location and the approval of the project by State Highway Administrator Bill Rosser and the N.C. Board of Transportation.

During the panels meeting, the board was informed that traffic engineers within the DOT Division II, which includes Carteret County, oppose the project. They came to that opinion after completing a traffic study because of ingress and egress concerns to the site. As a result, they believed the site presents potential safety hazards.

However, the water access committee is willing to proceed with the boat ramp progress because the opinion was only from staff engineers and not the N.C. State Highway Administrator or the state Board of Transportation, Tom Steepy, water access chairman said Friday.

Gordon Myers, division chief with the Wildlife Resources Commission, reported Thursday at the meeting that the DOT engineers have not seen the final drawings made by Stantec, a firm out of Wilmington, of the layout for the boat ramp.

They didnt have the length of the lanes or the concrete turning buffer, Commissioner Steepy added.

The committee will ask the DOT Division II engineers o look at the final proposal and the final recommendation from the WRC, the commissioner said.

The next step is for WRC and DOT to come together on an agreement for the project concerning safety issues, he said.

The committee is looking for a positive solution between the two parties in its recommendation. If they come to an agreement that is supported by the highway administrator, it will eventually go to the state board.

If there is not a positive agreement, then the recommendation does not go further.

The board also recognized that there were numerous concerns raised in several public meetings about the traffic in that area.

During the meeting, Mr. Myers gave the board a brief recap of the project, as well as a condensed list of comments made by citizens concerning the proposed ramp.

There were 421 comments on the subject, 172 against the project and 242 for the project, Mr. Meyers said.

However, there was also a petition from Cedar Point residents that added several more people against the project.

With the addition of the petition, it would put the count of those against the project higher than those for, Mr. Myers said. He added that those in Cedar Point are closer to the project site itself and there has been a trend for people closer to projects to be less for a project in that area.

Stantec, which was hired in January, conducted a traffic study of that area and collected traffic data during the peak summer months. The company concluded that traffic lights at the site were unnecessary.

The firm suggested a 100-foot long right turn lane with a 100-foot-long storage lane, a 100-foot left turn lane with a 100-foot storage lane and a 560-foot acceleration lane with a 155-foot straight taper.

Mr. Myers said that the WRC added a concrete island to provide a protected left turn for traffic turning left out of the boat access area.

The board also received an updated account of traffic data from John Rouse with DOT.

Mr. Rouse gave the number of rear-end collisions over the past five years for the area between the Highway 24 and Highway 58 intersection to the area on the Emerald Isle side of the B. Cameron Langston Bridge.

While the only deaths that occurred were two pedestrians and one person on a bicycle, Mr. Rouse said rear-end collisions between January 2002 and December 2006 totaled 58.

Thats 10 a year and most of it was during summertime and daytime traffic, Commissioner Steepy said.

Board member Connie Asero said that she also felt that during those busy summer months people would be more likely to let trucks and trailers out of the access as a courtesy because the traffic would be going so slow anyway.

                ****     2006 in Review : Carteret County  (News-Times Report)
12-30-06    Link:

    

---

  10-30-06   Link-      State of North Carolina Stats for September 2006

 

---

Panel OKs condo project   (Morehead City on Bogue Sound-Next to Hampton Inn)

By Brad Rich   Oct 18,2006

NEWS-TIMES

MOREHEAD CITY - The city planning board voted 6-1 Tuesday night to recommend the city council approve the site development master plan for a three-building, 60-unit condominium project on Bogue Sound, east of the Hampton Inn.

The board, which met in the municipal building on South 8^th Street , acted after about 45 minutes of back-and-forth discussion with representatives of Sound Water Development Co.

The land, which totals 4.6 acres, is known as the old Eure property, and Trip Eure, of Peterson, Eure and Associates, a New Bern architectural firm, led a team, including a landscape architect and an engineer, that addressed concerns planning board members raised Tuesday evening.

Dick Gambill cast the sole vote against approving the master plan.

The planning board included several conditions in its recommendation to the council, which could consider the master plan as early as its Nov. 14 meeting, also in the municipal building,

The board wants the developers to use larger plantings than they had planned to try to screen a boat storage area within the project, and wanted to make sure that the state Department of Transportation and the developers address concerns about drainage on the land.

Mr. Eure said the developers were willing to go with the larger plants around the boat storage area, and that they already had been working with DOT to not just address potential drainage problems but to improve the existing situation.

The drainage pipe that currently discharges near Arendell Street will be moved back (south) on the property and increased in size, he said. That will stop what his civil engineer called "scouring" which has occurred near the highway during and after heavy rains.

The problem, planning board member John Cheek noted Monday night, appears to have resulted in a dip in the highway.

Mr. Eures engineer said the problem has required "constant maintenance" by DOT over the years, and that moving the drainage off Arendell Street should rectify the situation.

Mr. Eure also said the newest design for the project has two points of egress and access, as desired by the planning board.

One, the one the development team has added since the last time the planning board looked at the plan, will be through the Hampton Inn-Bistro-By-the-Sea restaurant area.

Although one planning board member questioned whether that entrance and exit would be negotiable by fire trucks, Linda Staab, city-planning director, said fire department officials have seen the plan and given it the thumbs-up.

In fact, she said, the master plan for the project met or exceeded all city requirements, including those for open space and parking.

The planning boards other major concern Monday was the height of the buildings.

Members recalled that Mr. Eure previously had said the roofs wouldnt exceed 70 feet, but at least one of the buildings now shown on the plan is more than 85 feet tall.

Mr. Eure said that change had been made in order to accommodate a pitched roof, which is more aesthetically pleasing that the flat roofs that have been popular in major developers here in recent years.

The only part of the building that will reach the 85-foot level, Mr. Eure said, is the elevator shaft. The city unified development ordinance allows appurtenances, such as the shaft or a staircase tower, to be as tall as 90 feet.

But Mr. Eure told the planning board that the buildings will be constructed at an angle to the highway, so some of the elevator shaft should be shielded from view by the pitched roof. And, he said, the vast majority of the roofs on the three buildings will be well below 85 feet.

A total of 57 percent of the roof area, he said, will in fact be at 70 feet, 8 inches, almost exactly the 70 feet the planning board had wanted.

Mr. Eure and his team also said the design of the project attempts to "soften" the impact the buildings will have at pedestrian level.

There will be some parking spaces under each building, but those spaces will not be enclosed, and the developers are planning extensive landscaping and numerous plantings to make the view more pleasant than just walls.

In addition, Mr. Eure said, the development will be a masonry-brick combination, more " Morehead City and Carteret County " than the stucco style so often seen in Florida and Myrtle Beach , S.C.

---

---

Prices, Interest Rates Make Up 20/20 Real Estate Vision
by M. Anthony Carr
 

September 29, 2006

Many real estate prognosticators have been worrying about the slowing of the appreciation rates across real estate markets nationwide, scaring many buyers out of the market. The Office of Federal Housing Enterprise Oversite released its 2nd quarter figures on average housing prices this month and many market watchers jumped on the "dropping prices" bandwagon. The astute buyer, however, watches the prices and the interest rates adjustments together and then makes an offer at the optimal time to get the best house for the best price and terms. Headlined "House Price Appreciation Slows," the OFHEO report showed that prices nationally are not dropping, rather the rate of growth has slowed. On average, the houses in the 2nd quarter were 10 percent more valuable over the same period last year. So consumers and economists have on their worry hats about the future. Understandably, none of us like to see an investment stop growing; however, for the buyers, this slow in appreciation is good news. I've always held on to the belief that there's not a lot you can do about the future, so you have to live and make decisions based on the facts you have today. The reality about real estate, is that sometimes you have to buy when your life situation dictates it, not when the "price is right." However, for buyers who have been on the sidelines, the time may be right to hit the iron of making an offer, so to speak. Have you been watching the interest rates lately? Bankrate.com has its average 30-year fixed rate at 6.4 percent -- a drop of 3 basis points in one week and the lowest level all year. In addition, for those willing to pay more points, you could get a rate under the 6 percent threshold. Meanwhile, if the prices in your area are about to flatten before beginning their next cycle upward, and you MUST buy now, your waiting may have paid off -- if you jump over the fence of indecision and get a contract written now. Earlier this year, rates were standing at 6.8 percent. The drop of 4 basis points since then could save a shopper hundreds or thousands of dollars per year on a home mortgage, depending on the loan amount. At 6.4 percent, the principal/interest payment on each $100,000 borrowed is $625.51 -- that's about $25 less per month than when the interest rate was at 6.8 percent a couple months ago. Thus on a $400,000 loan amount, your payment would now be $100 less per month -- that's a savings of $1,200 per year (more than $6,000 over the next five years) if, and this is the big IF, you get off the fence, lock in your loan and make an offer on that house you've been waiting on. Watching the interest rates as well as housing prices in your market is the 20/20 Vision of the real estate market. Look to the future. Buy when prices are stable with a low interest rate and then hold on for the ride. According to some forecasters, this month may be the month buyers should get off the dime. The Financial Forecast Center, a market research group in Houston that monitors and forecasts indexes, interest rates and various other market data, predicts the average national interest rate will climb beyond the highest rate this year to 6.97 percent by January 2007. If that's the case, that money mentioned above will then cost a buyer $663.29 per month for every $100,000 borrowed. For a $400,000 mortgage, that would then be over $1,800 per year more in monthly payments for the same amount of money (assuming your favorite house is still available and that the price hasn't gone up again). If you're waiting for prices to hit bottom, it could happen while you wait or you could create your own "bottom" price by making an offer now before interest rates start their upward climb once again. Get the house you want for the price you want at today's interest rate.

---

Copyright 2006 Realty Times. All Rights Reserved.

With an award winning staff of writers providing up to the minute real estate news and advice, thousands of REALTORS in North America reporting daily market conditions, and a nationally broadcast television news program, Realty Times is the one-stop shop for real estate information. That's why over 10,000 real estate professionals have turned to us for their publicity needs.

wo Hot Topics for June 2006 NC Association of Realtors:

     Carteret Won't Halt Growth  
The Carteret County Board of Commissioners recently refused to clamp a moratorium on major development despite pleas from proponents who say a land rush threatens once-isolated waterways and small coastal communities. Instead, the board voted to continue working on a conservation ordinance that would address concerns about water pollution and rapid growth.
     Realistic Pricing in a Declining Market
The real estate market's strong performance in recent years has pumped up sellers' expectations of how much their houses are worth, but marketing a home at yesterday's prices can cost you today's sales. 

I will continue to monitor these topics as they are two important market areas we should be taking notes on..

---

HouseValues Survey Reveals Interesting Trends Among Second Home Buyers
by Blanche Evans-RealtyTimes    July 18, 2006

It's great news for the airlines. A large percentage of second home buyers would as soon fly as drive to reach their vacation homes, says a new survey by HomePages.com, a division of HouseValues that allows consumers to see aerial views and neighborhood-centric information of homes. While most second home buyers would like their second home to be an hour's drive or less (43 percent), 29 percent said they didn't mind catching a flight. With plenty of disposable income to spare, 21 percent of 1,300 consumers surveyed said they are considering purchasing a second home within a year, while another 42 percent say they're considering buying within the next two to six years. It appears the economy and housing are hardly going down the tubes. In fact, "vacation and investment homes remain a strong and prominent part of the real estate market, both as a means of providing an escape and providing supplemental short-term and long-term income," says Ian Morris, chief executive officer of HouseValues. A quarter of respondents said they are considering a second home for investment purposes, while 22 percent said they wanted one for "enjoyment," such as weekend getaways, vacations and family use. Forty percent of respondents said features such as water or mountains would not be a factor because they intended to buy for investment purposes. Among those who do consider geography an important factor in where they buy, 36 percent listed proximity to water as key, followed by mountains (17 percent), golf courses (5 percent) and the desert (2 percent). Yet, even disposable income runs out when it hits hurdles. Asked what factor would most likely cause them not to buy a second home, 32 percent of respondents listed rising home prices, followed by rising mortgage rates (18 percent) and job insecurity (12 percent). Thirty-eight percent listed a variety of other factors. Sixty-five percent of respondents were women, 35 percent were men. According to the preface of the 2006 National Association of Realtors Profile of Second-Home Owners, second-home owners are defined as those who "own one or more residential properties, in addition to a primary residence, and who use these properties either for vacation or investment purposes. Although both types of properties share several attributes, vacation homes are properties owned primarily for recreational use by the owner or their family, while investment properties are owned primarily to rent to others." Ownership of more than one home is increasingly common, notes NAR, due to peak earnings of the baby boomer segment of the population, less-than-stellar returns in other financial assets other than real estate, and popular tax incentives (including capital gains exclusions) and loan programs that favor buying property over other investment instruments. For example, between 2000 and 2005, the value of homes nationwide rose over 50 percent, while the Standard & Poor's 500 Index returned just over 2 percent for the same period, says NAR. Older baby boomers dominate the second-home market as vacation-home owners (age 59) and investors (age 55) and most own multiple properties. About six in ten survey respondents own two or more homes in addition to their primary residence.

---

Existing-Home Sales Expected to Fall 6.8% This Year

The housing boom has ended but sales at historically healthy levels will continue, and price appreciation will return to normal patterns across much of the country, according to the NATIONAL ASSOCIATION OF REALTORS.

David Lereah, NARs chief economist, says home sales are settling into a slower pace. "In recent years we were occasionally challenged to find appropriate superlatives to describe surprisingly high home sales," he says. "Now the housing market has cooled, but 2006 still expected to be the third strongest on record. In this case, experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability.

"But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable," Lereah adds.

Existing-home sales are projected to drop 6.8 percent to 6.6 million this year from the record 7.08 million in 2005. New-home sales are forecast to fall 13.4 percent to 1.11 million from a record 1.28 million in 2005. Housing starts are likely to decline 6.2 percent to 1.94 million in 2006 compared with 2.07 million last year.

NAR President Thomas M. Stevens from Vienna, Va., says rising interest rates have slowed home sales in many high cost markets, while job growth has boosted sales in some moderately priced areas.

"Broadly speaking, rising inventories have taken the pressure come off of unsustainable home price growth," says Stevens, senior vice president of NRT Inc. "For most of the nation, this means future home price gains will be much closer to the normal returns we expect from housing."

The 30-year fixed-rate mortgage should average 6.9 percent during the second half of the year, and the unemployment rate is expected to average 4.8 percent in 2006.

The national median existing-home price for all housing types is forecast to rise 5.3 percent this year to $231,300. With more construction in 2006 taking place in lower cost housing markets, the median new-home price is projected to increase 0.8 percent to $242,900.

"Historically, home prices rise 1.5 to 2 percentage points faster than the rate of inflation, so the rise we anticipate in existing home prices this year is actually a little above the high end of historic norms," Lereah said. "The double-digit home price gains we saw in 2005 underscore what a superlative year it was."

Inflation, as measured by the Consumer Price Index, is seen at 3.1 percent in 2006, compared with 3.4 percent last year. Growth in the U.S. gross domestic product is likely to be 3.4 percent this year. Inflation-adjusted disposable personal income should grow 3.1 percent this year.

Reprinted from REALTOR Magazine [June, 2006] with permission of the NATIONAL ASSOCIATION OF REALTORS. Copyright 2006. All rights reserved.