Katie Wilmeth, The Examiner
2006-10-12 09:00:00.0
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WASHINGTON -

The U.S. housing market looks like it may be headed for a soft landing instead of the crash many would-be home sellers have feared.

According to figures released Wednesday by the National Association of Realtors, home sales should bottom out by the end of 2006 and begin appreciating again by early next year — though not at the double digit rates seen in 2004 and 2005.

Analysts said the frenzied, record-breaking market of the last several years is nearing the end of its “correction” and prices should settle at more sustainable levels.

“Many potential home buyers who have been taking a wait-and-see attitude or taking their time and being methodical in the search process are being enticed by lower home prices,” said David Lereah, NAR’s chief economist.

“Given a positive economic backdrop of lower interest rates and job creation, we expect sales activity to pick up early next year.”

Nationally, existing home sales are expected to drop 8.9 percent in 2006 and new home sales are expected to drop by 17.3 percent. Housing prices are expected to rise by 1.6 percent for 2006.

Locally, home sales are expected to stay in line with national predictions. Economists with the George Mason University Center for Regional Analysis predict housing prices will continue to decline in many parts of the region over the next few months and pick up again next year.

In Northern Virginia, housing prices in September were down nearly 6 percent over the previous year, but the average price remains above $500,000.

kwilmeth@dcexaminer.com