The National Association of Realtors (NAR), an association with a reputation for housing market optimism, expects gains in new and existing home sales and housing starts in 2011.
Among the forecasts presented in the NAR's pending home sales announcement Thursday morning were the following:
• New home sales are estimated to rise 24% to 392,000 in 2011;
• Existing home sales are projected to rise about 8% to 5.2 million;
• Housing starts are forecast to rise 21% to 716,000; and
• Gross Domestic Product is expected to grow 2.5% in 2011.
“All the indicator trends are pointing to a gradual housing recovery,” said Lawrence Yun, NAR chief economist. “Home price prospects will vary depending largely upon local job market conditions. The national median home price, however, is expected to remain stable even with a continuing flow of distressed properties coming onto the market, as long as there is a steady demand of financially healthy home buyers."
The NAR was overly optimistic when looking ahead to 2010. In November of 2009, the group forecast existing home sales to be about 5.7 million in 2010. The actual figure is about 4.8 million. In late 2009, the group also forecast 2010 housing starts at about 752,000 for 2010 -- off by about 150,000.