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Former Federal Reserve Chairman Alan Greenspan and his successor Ben Bernanke, after reviewing home sales and mortgage rates in fall 2006, were hopeful that the market had bottomed out.
"It may be too soon to say that it's over. It may not be too soon to say that the worst is over," said Greenspan in an October 2006 speech in Richmond, according to press reports. |
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In a November 2006 speech, Bernanke said he saw some "encouraging" signs in recent housing reports.
"Although residential construction continues to sag, some indications suggest that the rate of home purchase may be stabilizing, perhaps in response to modest declines in mortgage interest rates over the past few months and lower prices in some markets," Bernanke said. |
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The laughing stock of all economists, National Association of Realtors Chief Economist Lawrence Yun (following in the footsteps of the former laughing stock of all economists David Lereah) throws in his two cents.
The (National Association of) Realtors expected only a 1 percent drop in the pace of existing home sales, and a 1 percent gain in median prices. Instead, 2007 will likely end with a12.5 percent plunge in the pace of sales, and nearly a 2 percent drop in prices, the first such decline on record.
The group's current forecast for 2008 calls for a 0.5 percent increase in the pace of sales, and a 0.3 percent rebound in prices. But Lawrence Yun, chief economist for the trade group, said that making forecasts is even tougher this year than it was a year ago.
Yun forecasts essentially flat prices in 2008. Yet, he also believes there's at least a one in four chance that prices will fall more than they did this year, and about the same chance that prices could rebound by 3 percent or more.
"I would not be surprised if home sales improves in 2008," he said. "At the same time I can also foresee a circumstance where buyers continue to pull back, the inventory sitting on the market continues to build and it causes prices to go down further." |
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"Some people spend an entire lifetime wondering if they made a difference in the world. But, the Marines don't have that problem." -- Ronald Reagan
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