IMPORTANT INFORMATION FOR CELL PHONE USERS

9 days from today, all cell phone numbers are being released to telemarketing companies and you will start to receive sales calls......YOU WILL BE CHARGED FOR THESE CALLS (available minutes will be consumed)

To prevent this, call the following number from your cell phone: 888-382-1222.It is the National DO NOT CALL list. It will only take a minute of your time. It blocks your number for five (5) years.

You must call from the cell phone number you want to have blocked. You cannot call from a different phone number.

This public service announcement is brought to you by Mike Stankewich, a Realtor, with ZipRealty, Inc. When you have real estate needs in Southwest Orange County, please contact Mike for assistance.

Top 3 Real Estate Agents for Westminster, California

Here are the current top 3 real estate agents for Westminster, California according to Point2Homes.com

1. Mike Stankewich, Realtor, MBA, e-PRO

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Phone:
(800) 225-5947 x8660
Cell:
(714) 697-0038

2. Brian Bassaline

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Phone:
714-842-9601


3. Coldwell Banker Coastal Alliance

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Another Record in Median Home Prices in Westminster, despite a Slow Market!

Another Record in Median Home Prices despite a Slow Market!
Housing prices have reached yet another record high in Orange County, with the median price rising to $646,000 in June, up $11,000 from May, according to data released by DataQuick Information Systems on July 19, 2006. This is an increase of 7% from a year ago. However sales were down 26.3% from a year ago, although they increased from May 2006.

Despite a cooling off and a reduction in the median home price in some US markets, there is no sign that the median price will fall in the Orange County's real estate market.
Be wary of those reporting declines of prices in some Orange County cities. The accuracy of statistics depends on the volume of data. For the county as a whole there is sufficicent data to support a trend. For individual cities the lack of sufficient data may result in abnomalities. The entry level market is stronger than the luxury home market, therefore if more entry homes sell in a particular city, the median price could be lower from a month ago. This is also true for Zip Codes within a city.

The issue is not demand but affordability. Demand is strong. In Anaheim the developer of the Platinum Triangle complex was intending to lease the 390 units of their first phase, however demand from buyers changed their mind. These will be sold as condos, starting at $300,000. There are 4000 people on the waiting list for the 390 units. I work with first time buyers on a regular basis and find that although they want to buy, often they can not qualify for the mortgage they would need to acquire a property that meets their needs, although lenders are working on inovative programs. For example CalHFA is offering a 40 year fixed rate loan at below market interest rates for first time buyers. Some lenders have introduced 50 year fixed loans. Several cities in Orange County offer incentives for first time buyers with moderate income levels. Huntington Beach is desirable for many reasons including the beaches, which means the prices will be higher. Thus sometimes I need to steer first time buyers to Buena Park, Cypress, or Stanton, so that they can afford what they are looking for.

The California affordability index is at an all time low, which means less than one person in six can afford the median priced home. This means that prices will stabilize near current levels, which is what we are beginning to experience. Appreciation increases will stay in the single digits, probably rising at the rate incomes rise. So the issue is not demand, but affordability. We have reached a plateau and this has created a stabilized real estate market in Orange County.

For the particular cities in my three market districts, the following are the new median home prices, based on June 2006 data. To compare these to May 2006 data see my previous report on Blog.MikeStankewich.com

HUNTINGTON BEACH DISTRICT
Huntington Beach
92646 - $700,000
92647 - $660,000
92648 - $896,500
92649 - $645,000
Sunset Beach – Insufficient Data
Surfside - Insufficient Data
Seal Beach - $909,500
Rossmoor – Insufficient Data
Fountain Valley - $732,000

NEWPORT BEACH DISTRICT
Costa Mesa
92626 - $725,000
92627 - $680,000
Newport Beach
92660 - $1,170,000
92661 - $3,500,000
92662 - Insufficient Data
92663 - $1,350,000
Newport Coast - $2,050,000
Corona del Mar - $1,729,500

GARDEN GROVE DISTRICT
Garden Grove
92840 - $590,000
92841 - $599,750
92843 - $544,500
92844 - $502,500
92845 - $606,000
Westminster - $620,000
Midway City - $582,500

The Orange County market has slowed down and normalized after three years of robust activity and double-digit appreciation. Housing sales, in terms of overall numbers, are down 26.3% from a year ago. This reflects that there are fewer buyers in the market, although I have found the ones in the market to be serious buyers. That means there are 74% of the buyers that were in the market last year. Many first time buyers are being priced out of the market. Housing inventory is up due to the lower sales volume, thus homes remain on the market longer before selling, mow about 50 days. Although a seller may have to wait longer to sell, the good news is that he can still get market value.

However a seller must be realistic in what the market value is. Many agents, in order to get a listing, will suggest a high price, and the property will sit in the market until the price is reduced. When price reductions start, the seller usually gets below market value in the end. These agents are usually those who offer discounted commissions and then offer selling agents below the market 2.5% to 3.0% rate. I am seeing listing agents offering 4% to the selling agent to induce a sale. While commissions are negotiable and buyer agents do not care what the listing agent makes, most buyer agents will shun showing properties at commissions below 2.5%. After all that is the way they make a living. With fewer showings the seller will usually have to accept a low-ball offer or wait a long time for a good offer. With double the available inventory and only 74% of the buyers from a year ago, only prime properties and those reasonably priced will sell in a reasonable time. Buyers have more choices. Buyers do have the ability to negotiate. This is especially true in higher value properties. Despite the trend to a buyer's market, we have a strong economy and real estate market that will support the value of existing properties.

Single-family homes stayed at a median price of about $700,000, according to data provided by DataQuick. Condominium median price was $456,500 for the same period.

There are numerous indicators that suggest a strong real estate market in Orange County. I will not go into all the details. Gary Watts, a noted real estate economist, provides a complete account of these factors. He predicts continued appreciation throughout 2006.

To see Gary Watts report visit http://Watts.MikeStankewich.com where you can download or print it.

The home buying season is here. If you are considering buying today is the best time. Inventory is good, so you have more choices to choose from. If you are considering selling now is the time to list your home to take advantage of the time most buyers are active from mid April through the end of summer.

To discuss this further or for more information contact Mike Stankewich at (714) 697-0038 or toll free at 1-800-225-5947 ext. 8660 or e-mail me at Mike.Stankewich@ZipRealty.com.

Visit our blog at blog.MikeStankewich.com
to see related articles, archives, and to post your comments to this market conditions report.

---------------0---------------

ZipRealty is a national full service brokerage with offices in the major U.S. metro areas. ZipRealty offers sellers full services, enhanced Internet marketing, and below market commissions, while maintaining the highest customer satisfaction rating in the real estate industry.

Buyers who use ZipRealty for their purchase receive a rebate of 20% of ZipRealty's commission, while receiving personalized service and complete client representation throughout the buying process.

Contact Mike Stankewich for your real estate needs. Visit MikeStankewich.com to search for all the properties on the MLS, to get pre-approved with E-LOAN, and for other valuable real estate and community information.

Owning Real Estate for Investment

Owning real estate for investment, especially residential and commercial real estate is inherently risky. Accidents happen. People can get hurt on the property. When people are injured or killed on property that does not belong to them, the injured victims and family members of deceased victims frequently sue the property owner for damages.

Insurance is the first line of defense to protect against claims arising from the property, but judgments can exceed the amount of insurance coverage and sometimes insurance coverage is denied. For example, if you have a $2,000,000 general liability policy and an injured tenant obtains a judgment against you for $3,000,000, you have a $1,000,000 problem that could have been avoided if your property were owned by an LLC rather than by you in your name.

When your LLC holds title to real estate and the worst case scenario occurs and the court awards the multi-million dollar judgment in favor of the plaintiff, the defendant will be the LLC instead of you and the creditor should only be able to collect the judgment from the LLC's assets. Your assets should be protected. You may lose your entire investment in the property owned by the LLC, but the rest of your assets should be safe. The cost to form an limited liability company to hold title to your real estate is insignificant compared to the money and time most people invest in their real estate.

You do not want to put your primary residence into an LLC - no Homestead protection available and you lose tax deduction for primary residence. However, there are several benefits to putting your investment property into an LLC. The two biggest reasons are for TAX shelter, and for asset protection. Heres an example: When I have the contract on a property, I quit claim the property into my LLC. Why? When I sell it, the capital gains taxes hit my LLC, not me personally. That means if I profited $50K on a deal for the year, but all my combined expenses for everything under the LLC came to $45K, I only pay taxes on $5K. You can deduct the mortgage interest as a business expense if the rental property is in the LLC.

Neat little trick. That’s why I have a good CPA. Find one who specializes in creative real estate investing. Don’t forget to tell your buyer’s mortgage broker that it is a corporate sale. He/she needs to know this.

If you have real estate that is rental property, placing the ownership of the real estate into an LLC protects you personally from any liability that may arise out of accidents on the property. If the property is in an LLC and there is some kind of judgment for damages sustained by someone on the property, the person could only look to the assets of the LLC to collect its judgment. By having all of your assets in another LLC, you try to maintain those free of any claims of creditors other than the mortgages which have to be on the real estate.

If you own investment real estate in your name, rather than through an entity such as an limited liability company, corporation or limited partnership, all of your assets and life savings are at risk and could be lost to a creditor if a problem occurs with the property. The LLC is the entity of choice today for holding title to real estate, the corporation and the limited partnership are infrequently used to hold title to real estate.



Two Primary Asset Protection Rules for Real Estate Investment

Asset Protection Rule Number 1. Buy as much insurance as you can afford to insure all of your LLC's real estate and business activity. Make sure you have written proof of insurance showing that the LLC is a named insured. If you transfer real property to your LLC, but do not obtain insurance naming the LLC as an insured, the insurance company will probably deny coverage.

Asset Protection Rule Number 2. Form an LLC to hold title to your real estate so that if a lawsuit occurs, the LLC will be the defendant rather than you. This is the key to real estate asset protection. If you own the real estate, all of your assets are at risk. You must transfer title to the real estate to your LLC to reduce the risk you will be named as a defendant in litigation arising from the real estate.

Corollary to Asset Protection Rule Number 2. You have to actually sign a deed conveying the real estate to the limited liability company and record the deed in the county in which the real property is located. It is a waste of time and money to form an LLC to hold title and never deed the property to the company because you continue to own it and will be the defendant in a lawsuit.

Caveat Number 1. Even if you form an LLC and transfer the real property to the LLC, you will remain liable for your conduct. For example, if your LLC owns a rental home, you install a new water heater in the home, the water heater blows up and a tenant is killed or injured, you will be sued because you are the person who caused the harm by improperly installing the water heater.

Caveat Number 2. To avoid being sued after you form your LLC (see Caveat Number 1 above) eliminate or minimize action with respect to the LLC and its property that creates a risk that you will be sued. You have less risk of being sued when the water heater needs replacing if you hire a good plumbing company to do the job instead of doing it yourself.

One of the most common questions real estate investors ask is "if I own multiple investment properties, should I put all the properties in one LLC or should I put each property in a separate LLC?"

The answer to the question is that usually, every investment property should be owned by a separate limited liability company that owns only one property and that is not engaged in any other business activity. The reason is simple: to maximize asset protection.

Consider the fairy tale of the three little pigs. The three little piggies each owned three rental properties. The first pig owned his properties in his name. The second pig owned all three properties in a single LLC. The third pig formed three LLCs and each property was owned by a separate LLC. By sheer coincidence, the water heater in one of the properties owned by each pig blew up and killed a tenant.

The first pig got sued by the family of the deceased and lost all of his life savings when the judgment exceeded the insurance coverage. The second pig lost all of his equity in his three properties, but his other personal assets were protected. The third pig lost only his equity in the property owned by the one LLC and his personal assets and the equity in the other two properties were protected.

Asset Protection Rule Number 2 Hold title to investment real estate through a limited liability company. Most real estate investors known that the reason to form an LLC and to transfer investment real estate to the LLC is to reduce or eliminate the risk that the investor may lose his or her life savings because of a disaster with the property. If the water heater blows up at the rental property and you hold title in your name, you may be sued and a judgment that exceeds your insurance coverage could take your life savings. If your LLC owns the property, it will be the defendant in the lawsuit and you should not be liable personally unless you were the reason the water heater blew up.

Asset Protection Rule Number 3: Diversity your assets. The old adage "do not put all of your eggs in one basket" applies to real estate investment just like it does to any type of investment. If you satisfy Asset Protection Rule Number 2 and create a single LLC to hold title to your three investment properties and a disaster occurs on one of the properties, the creditor could reach all of the equity in all the assets owned by that limited liability company, i.e., all three properties.

Do Not Be Pennywise & Pound Foolish. If you buy three properties today for no money down, you will not lose much if you lose all three properties in the near future (but you might in the future when the properties appreciate in value). However, if you have $50,000 of equity in each property, you risk losing $100,000 that could easily be protected by having a separate LLC own each property. Consider the one time cost to form an LLC as an alternate form of insurance that you should not go without. The cost to form an LLC is peanuts compared to the amount you may invest in property coupled with the property's appreciation in value over time.

Demand is Strong, however Buyer's Low Affordability Index is Cooling the Market!

Housing prices have reached yet another record high, with the median price rising to $635,000 in May up $7000 from April, according to data released by DataQuick on June 21, 2006. This is an increase of 7.6% from a year ago. However sales fell to the lowest level since April of 1995, down 32% from last year.

Despite a cooling off and a reduction in the median home price in some US markets, there is no sign that the median price will fall in the Orange County's real estate market.

Be wary of those reporting declines of prices in some Orange County cities. The accuracy of statistics depends on the volume of data. For the county as a whole there is sufficicent data to support a trend. For individual cities the lack of sufficient data may result in abnomalities. The entry level market is stronger than the luxury home market, therefore if more entry homes sell in a particular city, the median price could be lower from a month ago. This is also true for Zip Codes within a city.

The issue is not demand but affordability. Demand is strong. In Anaheim the developer of the Platinum Triangle complex was intending to lease the 390 units of their first phase, however demand from buyers changed their mind. These will be sold as condos, starting at $300,000. There are 4000 people on the waiting list for the 390 units. I work with first time buyers on a regular basis and find that although they want to buy, often they can not qualify for the mortgage they would need to acquire a property that meets their needs, although lenders are working on inovative programs. For example CalHFA is offering a 40 year fixed rate loan at below market interest rates for first time buyers. Several cities in Orange County offer incentives for first time buyers with moderate income levels. Huntington Beach is desirable for many reasons including the beaches, which means the prices will be higher. Thus sometimes I need to steer first time buyers to Buena Park, Cypress, or Stanton, so that they can afford what they are looking for.

The California affordability index is at an all time low, which means less than one person in six can afford the median priced home. This means that prices will stabilize near current levels, which is what we are beginning to experience. Appreciation increases will stay in the single digits, probably rising at the rate incomes rise. So the issue is not demand, but affordability. We have reached a plateau and this has created a stabilized real estate market in Orange County.

For the particular cities in my three market districts, the following are the new median home prices, based on May 2006 data. To compare these to April 2006 date see my previous report on Blog.MikeStankewich.com

HUNTINGTON BEACH DISTRICT
Huntington Beach
92646 - $635,000
92647 - $668,000
92648 - $938,250
92649 - $695,000
Sunset Beach - Insufficient Data
Surfside - Insufficient Data
Seal Beach - $885,000
Rossmoor - Insufficient Data
Fountain Valley - $700,000

NEWPORT BEACH DISTRICT
Costa Mesa
92626 - $733,250
92627 - $687,500
Newport Beach
92660 - $1,349,000
92661 - $2,430,000
92662 - $2,312,500
92663 - $1,080,000
Newport Coast - $2186,000
Corona del Mar - $1,800,000

GARDEN GROVE DISTRICT
Garden Grove
92840 - $575,000
92841 - $594,000
92843 - $530,000
92844 - $502,500
92845 - $621,500
Westminster - $600,000
Midway City - $542,250

The Orange County market has normalized after three years of robust activity and double-digit appreciation. Housing sales, in terms of overall numbers, is down 32% from a year ago. This reflects that there are fewer buyers in the market, although I have found the ones in the market to be serious buyers. That means there are 68% of the buyers that were in the market last year. Many first time buyers are being priced out of the market. Housing inventory is up due to the lower sales volume, thus homes remain on the market longer before selling, usually over 60 days. Although a seller may have to wait longer to sell, the good news is that he can still get market value.

However a seller must be realistic in what the market value is. Many agents, in order to get a listing, will suggest a high price, and the property will sit in the market until the price is reduced. When price reductions start, the seller usually gets below market value in the end. These agents are usually those who offer discounted commissions and then offer selling agents below the market 2.5% to 3.0% rate. I am seeing listing agents offering 4% to the selling agent to induce a sale. While commissions are negotiable and buyer agents do not care what the listing agent makes, most buyer agents will shun showing properties at commissions below 2.5%. After all that is the way they make a living. With fewer showings the seller will usually have to accept a low-ball offer or wait a long time for a good offer. With double the available inventory and only 68% of the buyers from a year ago, only prime properties and those reasonably priced will sell in a reasonable time. Buyers have more choices. Buyers do have the ability to negotiate. This is especially true in higher value properties. Despite the trend to a buyer's market, we have a strong economy and real estate market that will support the value of existing properties.

Single-family homes stayed at a median price of $705,000, according to data provided by DataQuick. Condominium median price rosr to $468,000 for the same period.

There are numerous indicators that suggest a strong real estate market in Orange County. I will not go into all the details. Gary Watts, a noted real estate economist, provides a complete account of these factors. He predicts continued appreciation throughout 2006.

To see Gary Watts report visit http://Watts.MikeStankewich.com where you can download or print it.

The home buying season is here. If you are considering buying today is the best time. Inventory is good, so you have more choices to choose from. If you are considering selling now is the time to list your home to take advantage of the time most buyers are active from mid April through summer.

There is an interesting article titled "Home prices up, by any math" by Jonathan Lansher in the Orange County Register dated May 31, 2006. Go to MikeStankewich.BlogSpot.com and click on the link to see the article on OCRegister.com, as well as other related articles.

To discuss this further or for more information contact Mike Stankewich at (714) 697-0038 or toll free at 1-800-225-5947 ext. 8660 or e-mail me at Mike.Stankewich@ZipRealty.com.

Visit our blog at blog.MikeStankewich.com
to see related articles, archives, and to post your comments to this market conditions report.

---------------0---------------

ZipRealty is a national full service brokerage with offices in the major U.S. metro areas. ZipRealty offers sellers full services, enhanced Internet marketing, and below market commissions, while maintaining the highest customer satisfaction rating in the real estate industry.

Buyers who use ZipRealty for their purchase receive a rebate of 20% of ZipRealty's commission, while receiving personalized service and complete client representation throughout the buying process.

Contact Mike Stankewich for your real estate needs. Visit MikeStankewich.com to search for all the properties on the MLS, to get pre-approved with E-LOAN, and for other valuable real estate and community information.

Demand is Strong, However Affordability is an Issue!

Housing prices have reached another record high, with the median price rising to $628,000 in April up $5000 from March, according to data released by DataQuick on May 17, 2006. This is an increase of 9% from a year ago. However sales fell to the lowest level since April of 1995, down 28% from last year.

Despite a cooling off and a reduction in the median home price in some US markets, there is no sign that the median price will fall in the Orange County's real estate market.

The issue is not demand but affordability. Demand is strong. In Anaheim the developer of the Platinum Triangle complex was intending to lease the 390 units of their first phase, however demand from buyers changed their mind. These will be sold as condos, starting at $300,000. There are 4000 people on the waiting list for the 390 units. I work with first time buyers on a regular basis and find that although they want to buy, often they can not qualify for the mortgage they would need to acquire a property that meets their needs. Huntington Beach is desirable for many reasons including the beaches, which means the prices will be higher. Thus sometimes I need to steer first time buyers to Buena Park, Cypress, or Stanton, so that they can afford what they are looking for.

The California affordability index is at an all time low, which means less than one person in six can afford the median priced home. This means that prices will stabilize near current levels. Appreciation increases will be in the single digits, probably rising at the rate incomes rise. So the issue is not demand, but affordability. We have reached a plateau and this has created a stabilized real estate market in Orange County.

For the particular cities in my three market districts, the following are the new median home prices, based on April 2006 data.

HUNTINGTON BEACH DISTRICT
Huntington Beach
Ø 92646 - $572,000
Ø 92647 - $647,000
Ø 92648 - $970,000
Ø 92649 - $672,500
Sunset Beach – Insufficient Data
Surfside - Insufficient Data
Seal Beach - $870,000
Rossmoor – Insufficient Data
Fountain Valley - $747,500

NEWPORT BEACH DISTRICT
Costa Mesa
Ø 92626 - $712,500
Ø 92627 - $725,000
Newport Beach
Ø 92660 - $1,445,000
Ø 92661 - $3,500,000
Ø 92662 - $2,475,000
Ø 92663 - $1,200,000
Newport Coast - $2,225,000
Corona del Mar - $1,545,000

GARDEN GROVE DISTRICT
Garden Grove
Ø 92840 - $585,000
Ø 92841 - $610,000
Ø 92843 - $505,000
Ø 92844 - $466,000
Ø 92845 - $645,000
Westminster - $630,000
Midway City - $482,500

The Orange County market has normalized after three years of robust activity and double-digit appreciation. Housing sales, in terms of overall numbers, is down 28% from a year ago. This reflects that there are fewer buyers in the market, although I have found the ones in the market to be serious buyers. That means there are 72% of the buyers that were in the market last year. Many first time buyers are being priced out of the market. Housing inventory is up due to the lower sales volume, thus homes remain on the market longer before selling, usually over 60 days. Although a seller may have to wait longer to sell, the good news is that he can still get market value.

However a seller must be realistic in what the market value is. Many agents, in order to get a listing, will suggest a high price, and the property will sit in the market until the price is reduced. When price reductions start, the seller usually gets below market value in the end. These agents are usually those who offer discounted commissions and then offer selling agents below the market 2.5% to 3.0% rate. While commissions are negotiable and buyer agents do not care what the listing agent makes, most buyer agents will shun showing properties at commissions below 2.5%. After all that is the way they make a living. With fewer showings the seller will usually have to accept a low-ball offer or wait a long time for a good offer. With double the available inventory and only 72% of the buyers from a year ago, only prime properties and those reasonably priced will sell in a reasonable time. Buyers have more choices. Buyers do have the ability to negotiate. This is especially true in higher value properties. Despite the trend to a buyer's market, we have a strong economy and real estate market that will support the value of existing properties.

Single-family homes rose to a median price of $705,000, according to data provided by DataQuick. Condominium median price was $460,000 for the same period.

There are numerous indicators that suggest a strong real estate market in Orange County. I will not go into all the details. Gary Watts, a noted real estate economist, provides a complete account of these factors. He predicts continued appreciation throughout 2006.

To see Gary Watts report visit http://Watts.MikeStankewich.com where you can download or print it.

The home buying season has begun. If you are considering buying today is the best time. Inventory is good, so you have more choices to choose from. If you are considering selling now is the time to list your home to take advantage of the time most buyers are active from mid April until summer.

To discuss this further contact Mike Stankewich at (714) 697-0038 or toll free at 1-800-225-5947 ext. 8660 or e-mail me at Mike.Stankewich@ZipRealty.com.

Visit our blog at blog.MikeStankewich.com
to see related articles, archives, and to post your comments to this market conditions report.

---------------0---------------

ZipRealty is a national full service brokerage with offices in the major U.S. metro areas. ZipRealty offers sellers full services, enhanced Internet marketing, and below market commissions, while maintaining the highest customer satisfaction rating in the real estate industry.

Buyers who use ZipRealty for their purchase receive a rebate of 20% of ZipRealty's commission, while receiving personalized service and complete client representation throughout the buying process.

Contact Mike Stankewich for your real estate needs. Visit MikeStankewich.com to search for all the properties on the MLS, to get pre-approved with E-LOAN, and for other valuable real estate and community information.

Housing Market is Taking a Breather but Staying Strong!

WASHINGTON, D.C. – The housing market is settling but should experience its third best year in 2006, with job creation and a growing economy offsetting some of the effects of rising interest rates, according to the National Association of Realtors®.

David Lereah, NAR’s chief economist, said the market is adjusting to higher mortgage interest rates. “Coming off a prolonged period of record sales, housing is taking something of a breather this year,” he said. “Even so, interest rates remain historically low, we’ve added about 2 million jobs over the last 12 months and the economy continues to grow – that will sustain healthy levels of home sales in 2006, but they’ll stay below the peaks experienced during the last two years.”

Lereah forecasts the 30-year fixed-rate mortgage to rise to 7.0 percent this summer and hold at that level during the second half of the year. The unemployment rate is expected to average 4.7 percent, compared with 5.1 percent in 2005, while growth in the U.S. gross domestic product is seen at 3.5 percent in 2006, the same as last year.

Existing-home sales are likely to fall 6.4 percent to 6.62 million in 2006 from a record 7.08 million last year. New-home sales are projected to drop 11.6 percent to 1.13 million from last year’s record of 1.28 million. Housing starts should decline 3.7 percent to 1.99 million this year compared with 2.07 million in 2005.

NAR President Thomas M. Stevens from Vienna, Va., said home prices are returning to normal patterns. “Since the supply of homes on the market has improved to roughly balanced levels, overall home price appreciation has cooled to single-digit rates,” said Stevens, senior vice president of NRT Inc. “Most of the country is now entering a period of equilibrium in the housing market, which is good for the long-term health of the sector. Owners in most areas can now expect steadier and more normal rates of return on their housing investment.”

The national median existing-home price for all housing types is expected to rise 5.7 percent this year to $232,200, while the median new-home price is forecast to increase 2.2 percent to $242,500.

Inflation as measured by the Consumer Price Index is projected at 3.4 percent in 2006. Inflation-adjusted disposable personal income is likely to grow 3.4 percent this year.

Sellers Earn 16% Nore by Using an Agent!

A clear downtrend in FSBOs has been seen since that market share experienced a cyclical peak of 18 percent in 1997. Only 13 percent of sellers conducted transactions without the assistance of a real estate professional in 2005, and 39 percent of those FSBO transactions were “closely held” between parties who knew each other in advance, up from 32 percent in 2004. The FSBO market share was at 14 percent in both 2003 and 2004. NAR began tracking the FSBO market in 1981; the record was 20 percent in 1987.

“In reality, the term ‘FSBO’ is a misnomer when used to broadly describe homes sold directly by owners. Since two out of five of these transactions are between related parties, and those properties are not placed on the open market, we believe that ‘unrepresented sellers’ would be a much more accurate term to describe this segment,” Stevens said.

The median home price for sellers who use an agent is 16.0 percent higher than a home sold directly by an owner; $230,000 vs. $198,200; there were no significant differences between the types of homes sold. “While many unrepresented sellers are motivated to save on paying a commission, we think the price difference speaks for itself,” Stevens said. “Owners without professional assistance also have problems in understanding and completing paperwork, prepping the home for sale, getting the right price and selling within the time planned.”

Survey data don’t explain the price difference, but Stevens offered some context. “Agents know best how to prepare a home and maximize value, agents provide broader exposure to the market and are more likely to generate multiple bids, and the portion of sales that are between private parties are likely to be at a lower price than those on the open market.”

“The housing market today contrasts sharply with predictions a decade ago that the Internet would ‘disintermediate’ real estate agents, including speculation that NAR membership would fall in half. In reality, it’s grown dramatically – selling real estate is not like selling a book or buying an airline ticket,” he said.