Through most of 2006 there was a lot of discussion about the housing slowdown. The debate about whether or not America was going to witness a crash in the housing market has all but been settled. There is no question anymore that the housing pullback has been a tough one, and the ripple effect through the economy has yet to be fully realized. Late last month we got the numbers for January home sales. What we saw were mixed messages. On Feb 27 we were hit with the positive news that existing home sales rose 3.0% from December to January which was the biggest monthly increase in 2 years. Then the following day we were hit with the worrisome news that during the same month sales of existing homes dropped 16.6%! We hadn't seen a drop of that size since back in January 1994.
So I was wondering at the time if this would be enough to start up a debate again over the housing market and whether or not the pullback had run its course. Since then all we seem to have heard about is the subprime mortgage business and how millions of people are about to lose their homes leading us to believe that the housing woes have yet to run their course.
But like everything, geography is bound to play in role in your thoughts on the housing market. According to a report from bankrate.com there are some areas in the country that will enjoy a very good year in 2007.
For example Albuquerque, N.M. is predicted to see a great year of price increases. The average home price during fourth quarter 2006 was $187,500. By the end of 2007 it is predicted to climb to $247,900. Think about that... we are talking about a 32% increase here. Suffice it to say, if you are a resident of Albuquerque you would disagree with anyone saying that the housing market was showing weakness.
What about the opposite side of the coin? We talk a lot here about the auto industry so let's take a look Detroit, MI. The housing market in Detroit is far from staging a rebound. During 2006 average home prices fell by 1% and they are predicted to see another drop of 4.6% during 2007. Not too surprising if you ask me.
Some other strong areas include Atlanta, Syracuse, Nashville and Raleigh with weak markets expected in Miami, Las Vegas and Cincinnati.
So as we head deeper into 2007 and start to hear more and more about the housing market, always keep in mind that the market can be anywhere from fantastic to downright horrible. It just depends on where you wake up in the morning.
So tell us what you are seeing where you live. We are curious to hear first-hand what our readers are witnessing in the areas they live.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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