WASHINGTON (October 31, 2006) – An overall housing market slowdown and a shift in priorities among younger consumers entering the housing market may cause many who would have been prime home buying candidates in years past to start pushing their purchases farther into the future, according to industry experts at ULI’s (Urban Land Institute's) recent annual fall meeting in Denver.
Panelists at various sessions at the meeting noted that the recent housing market slide has made some would-be buyers reluctant about purchasing on the downswing. “Now, we are at a time when the cost of renting is more competitive (with the cost of buying a home),” said J. Ronald Terwilliger, chairman and chief executive officer of Trammell Crow Residential in Atlanta. “Over the past year, the psychology of the market has changed. People no longer feel that they need to get into homeownership now or they will get passed by.” Given the slower rates of appreciation, Terwilliger said homeownership is a wise choice “if you plan on being in your home for at least five years.”
The immediate impact of housing market conditions on buying decisions was outlined by James Chung, president, Reach Advisors in Belmont, Mass. A consumer survey his firm conducted in early October shows a notable slip in confidence about the housing outlook compared to a survey conducted 15 months prior. In July 2005, 27 percent of those surveyed said their plans to move were being affected by market conditions; the most recent survey, taken between October 6 and 13, found that 41 percent were rethinking their plans. In July 2005, 13 percent of the respondents anticipated price drops; last month, 32 percent expected drops. Moreover, those most reluctant to buy now are likely those who don’t already own, he noted.
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