Why Real Estate Markets Will Improve in 2007

There are reasons to be optimistic about real estate next year, a BusinessWeek Online analyst says.

New and existing home sales might slide further in 2007, but there won’t be a sharp decline like there was in the early ‘80s and ‘90s. Why? Because the overall economy is in good shape.

Some markets will become much more affordable, making a home purchase possible for people who never could have afforded one previously.

Speculators who drove up housing prices will move on to speculate on something else.

Fewer new homes will be built, and surplus inventory will be absorbed, so prices will stabilize.

Mortgage rates will remain at relatively low prices and could go even lower if the Federal Funds Rate falls, which it might.

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