After years of record sales and high appreciation values, the real estate market appears to be slowing.

While many parts of the country escaped the full force of the real estate frenzy, many of the country’s hottest market’s including Miami, California, and Arizona saw explosive growth between 2000 and 2005, with prices soaring 55 percent to 100 percent over and above inflation. The only that seemed higher than the prices was the demand for new homes. In many locations throughout the nation, new home developments sold out in matters of days, some even before construction was completed.

Even as many statistics still seem to be pointing toward a boom market–nationwide sales figures remain high and as new home construction continues as at breakneck rate–there are many subtle signs that the real estate market is beginning to slow.

For instance, in Florida, the once overheated market has cooled considerably, with a 20 percent drop in sales in February of 2006 as compared to the same period in 2005. Sales in California have also seemed sluggish with a 15 percent drop for the same period. Anecdotal stories further suggest the days of the real estate boom are waning. Houses appear to be staying on the market longer, and advertising boasting “reduced rates” on houses and condos are slowly popping up again.

Experts disagree on whether today’s downturn will snowball into a bust market, or if real estate is simply stabilizing. “Our nation’s housing industry is managing a soft landing,” David Lereah, Chief Economist for the National Association of Realtors said on the organization’s website.

Other experts are a little more pessimistic, to a point. Mark Vitner, senior economist for Wachovia Corp told bizjoournal.com he predicts a 20 percent pullback in sales of new and existing homes in the next few years. But he is quick to caution he is not predicting an end-of-days bust that drags the nation’s financial future down with it. “The economy is strong and has been strong for the last several years. It’s hard for me to see an overall slowdown,” Vitner told the website.

But one thing’s for sure, the days of housing developments selling out overnight are gone. It is a buyer’s market,” Vitner concludes.

By David Plowman

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