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Oh, the difference a year makes. In 2005, the median price of an existing, single-family home in the U.S. rose by nearly 13% and a condo by 12%. In 2006, the National Association of Realtors expects those rates of price appreciation to fall to 5% and 4% respectively. Meantime, the supply of homes nationwide has increased and demand may have fallen a bit because of affordability and rising interest rates (30-year fixed rates are expected to hit 7% by year-end). Prices haven't necessarily fallen, but in many places they have flattened.
As the market returns to greater balance between buyers and sellers and less frenzy, buyers have more opportunity to find and negotiate for a home they want, and sellers will have adjust their expectations for profit to the new reality. In our special report, we offer tips for both groups, excerpted from eighth edition of Kiplinger's Buying and Selling a Home: Make the Right Choice in Any Market (Kaplan Publishing, 2006).
Plus, we offer an outlook on the housing, rental and commercial real estate markets. Kiplinger expects a small rise in home prices this year and next but flat sales next year. We also anticipate a jump in apartment and office rental rates next year.
Tips for Buyers and Sellers
In this cooling market, sellers have to find the pricing sweet spot and work harder to reel in a buyer, who has more homes to choose from and more bargaining clout.
What's Ahead for Housing?
Talk of a nationwide housing bust is overblown, despite price-slashing by sellers in some once-hot regions and mounting order cancellations seen by home builders.
Apartment Rents Are on the Rise
Expect to pay more for an apartment next year because home and condo prices still are too high for many families, who are forced to rent.
The High Price of Office Space
Although the pace of hikes in commerical rental rates will slow in the coming months, expect to see a rise in rents over the next year.
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