Economists See Further Home Sales Declines

The ongoing decline in home sales will not bottom out until the third and fourth quarters of this year, according to a committee of chief economists from major U.S. banks.The Economic Advisory Committee of the American Bankers Association is forecasting a 6.5% decline in existing- and new-home sales, compared with last year's totals. "The committee expects that home sales will bottom out toward the end of 2007," says the EAC's regional economic outlook report. "The commercial real estate sector is expected to stay strong, which should help to offset the drag of the residential real estate sector and support the growth of the overall economy." The report notes that existing-home sales in California dropped by 25% last year but sales have remained steady since mid-2006. "There are signs that the California market may have reached a soft landing," the EAC report says. The ABA can be found online at http://www.aba.com.