Normal Market in 2007?

Interested in another forecast? Here's the word from the 93rd annual Mortgage Bankers Association (MBA) expo in Chicago.
2007 mortgage production is expected to decline by 14% (down 19% in 2006)
New home sales down 8% (down 18% in 2006)
Existing home sales down 8% (down 9% in 2006)

The take-home message is that we have returned to a normal market, and it will probably take another year to work off the excess inventory. As a seller, you need to be very realistic about price, and not have a fixed price in your head ("what my neighbor sold for last year").

As a buyer, realize that prices may drift a bit lower, but not dramatically. Inventory has begun to decline as sellers who cannot sell for the price they want have taken their homes off the market for the time being. In other words, we may see more serious sellers in 2007 as those who don't have to sell stand aside. That makes this year a great opportunity to buy at the bottom of the market. Of course, no one knows the exact month and day the bottom will occur, but just getting close is a great position to be in.

I've run across many willing buyers who would love to move, but can't sell their place for what they need to make the move, or keep their tax base or whatever. Gridlock! Nobody can move. But once some of the cars are taken off the road, things will flow a lot better. So when listings expire and the owners decide not to put their home back on the market, I see that as a good sign.