The National Association of Realtors' annual convention started with a bang — literally — Tuesday morning when the nearby Frontier...
LAS VEGAS — The National Association of Realtors’ annual convention started with a bang — literally — Tuesday morning when the nearby Frontier hotel imploded, sending up a huge plume of dust and making the ground shake.
It was a decent metaphor for the current state of the real-estate industry. The boom is over and the dust is now settling, Lawrence Yun, the group’s chief economist, told the thousands of real-estate professionals meeting here.
This is the first year since the Great Depression to register a nationwide decline in median home prices, Yun said. His latest numbers put the drop at 1.7 percent. “We’re in a time of fear,” he said.
For 2008, Yun is predicting prices nationally will be flat, as buyers react to gloomy housing-industry news by sitting this one out.
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But, as Yun said repeatedly, real estate is intensely local. National trends mean about as much to buyers and sellers in any one city as a national weather forecast would mean to them.
That’s why things will be bad in some areas, such as Ohio, which has experienced significant job losses, and good in others.
Yun suggested Seattle will continue as one of the bright lights, which it’s been this year. Median year-over-year home prices have risen every month save October, when they were down slightly.
But Seattle’s strength may go beyond the usual reasons: a strong local economy and good job growth propelling housing demand.
Yun suggested that Seattle may be joining such cities as New York and San Francisco as “superstar cities” whose desirability attracts affluent newcomers who bring the buying power to continue pumping up housing prices.
In Washington, the group issued its ninth-straight downwardly revised monthly forecast, saying nationally existing home sales will fall 12.7 percent this year to 5.66 million, down from 6.48 million last year and the lowest level since 2002.
The group forecast sales will rise slightly next year to 5.69 million, but that is down from last month’s prediction of 6.12 million.
Yun’s forecast shows existing home sales bottoming out in the current quarter, then rebounding by mid-2008.
However, many other economists are far less optimistic. They predict weak sales, sinking new home construction and falling prices through next year and emphasize that those problems could worsen if the economy sinks into a recession.
The Realtors group said the median price for U.S. existing homes — the point at which half sold for more and half for less — will sink to $218,200 this year and remain basically flat next year at $218,300. In October, the median price for single-family homes in King County was $443,950. In Snohomish County last month, the median was $374,334.
If median prices on the national level fall this year, it will be the first price decline in the nearly 40 years that the trade group has tracked median prices.
Other ways to measure national housing prices, such as the S&P/Case-Shiller index, have already shown price declines.
The Associated Press contributed to this report.