Keep an eye on the supply of homes in your market.
Inventories may have to more than double before prices begin to decline, but if you know when inventories are sufficient to impact prices you could be in a better position to negotiate.
New York City-based Corzen Real Estate Indicators says the number of existing homes listed on Realtor.com rose 60 percent to 2.3 million in May 2006 this year, but home prices continued to rise.
The national median price of all homes -- single-family, townhomes, condominiums and co-ops -- rose 4.2 percent from $214,000 in April 2005 to $223,000 this April, according to the latest figures from the National Association of Realtors.
In its latest repeat-sales index for single-family homes only, the Office of Federal Housing Enterprise Oversight says home prices rose nationwide 12.54 percent from the first quarter of 2005 to the same quarter this year.
Corzen said sales declines were evident only where inventories increased by far more than 60 percent, as home price increases or stable prices were the norm in the vast majority of the 100 largest metro areas (1,655 counties) it tracks for the report.
"We do see significant decline in asking prices in certain counties, where the volume of available properties online has increased as much 400 percent," said Charles Thibault, a Corzen market analyst
"However, 75 percent of the counties in Corzen's sample showed no change or increases in prices, suggesting that asking prices in overall market are not in a downward cycle -- yet," he added.
The survey is based on a ZIPcode analysis of homes listed online at Realtor.com. Each month, Corzen gathers data on home listing including its location, list price, number of bedrooms and bathrooms and the listing broker or agent.
Corzen's survey of homes in the nation's 100 largest metropolitan areas reveals that the median list price nationwide was up 8.4 percent in May 2006 compared to May 2005.
Asking prices for existing homes fell most sharply in metros in Florida, California, Massachusetts and in the Virginia suburbs outside of Washington, DC.
Corzen said the number of listings in Florida counties it tracks grew as much as 400 percent between May 2005 and May 2006 as home prices declined 25 percent during the same period.
The company also reported some of the largest increases in list prices from May 2005 to May 2006 came from migration following Hurricane Katrina in September, 2005. Around Baton Rouge, LA, asking prices were up 56 percent and in Galveston, Texas, prices were up 44 percent, Corzen reported.
The OFHEO also said the post storm go-to area of Hattiesburg, MS, saw prices rise by 12.16 percent during the first quarter this year, and areas more directly hit by Hurricane Katrina also enjoyed price jumps from the first quarter 2005 to the first quarter 2006 -- New Orleans, LA, was up 14.32; Baton Rouge, LA, up 12.07 percent; Gulfport-Biloxi, MS, up 15.88 percent and Mobile, AL, up 14.61 percent.
