The California Association of Realtors recently revised its 2007 housing outlook based on “newfound weakness” in the housing market over the past few months.

CAR now expects sales of existing single-family homes to end the year down 19.4% below last year’s pace, said Robert Kleinhenz, the association’s deputy chief economist.

“Especially in the last three months, there’s been newfound weakness in the market, and we’ve had to adjust our sales decline accordingly,” Kleinhenz said today.

The association originally forecast last October that sales this year would fall 7%, then changed that figure to a 14% drop in its mid-year revision.

Meanwhile, the association expects overall house prices to end the year up 3.8%, instead of falling 2% as originally expected, due mainly to the change in the types of homes that are selling, he said.

Stronger sales for pricier homes are pulling the median price upward, Kleinhenz said. Sales and prices are down for lower-priced homes because first-time buyers and those with weaker credit are having a harder time getting financing.

Home sales have weakened even further this month because of a credit crunch that began when Wall Street investors began shying away from the types of loans used by borrowers with weaker credit or finances.

Steven Thomas, president of RE/MAX Real Estate Services in Aliso Viejo reported today that escrows have fallen to 1,467 during the past 30 days, compared to 1,804 in the 30 days ending on Aug. 9. That’s the smallest number of sales contracts since January. Meanwhile, Orange County’s inventory of homes for sale rose to 17,847, up from 17,611 two weeks ago.

Source:

http://blogs.ocregister.com/lansner/archives/2007/08/realtors_again_re.html#more