Economic Expansion Fueling Housing

As we enter the heart of the spring home buying season, the U.S. housing market is continuing to turn in strong performances month after month, so much so that at least one top economist believes the current expansion will carry into the Year 2000.

According to a National Association of Realtor's forecast, the national median existing-home price is expected to rise 6.3 percent this year to $138,300, while the median price for new homes will increase 7.7 percent to $163,200 for 1999.

NAR chief economist Jim Smith is predicting that, "On January 16, 2000, the current period of economic growth will become the longest one in the history of the United States, topping the 106 months from February 15, 1961 through December 15, 1969."

Smith cites the combination of high employment, low interest rates and rising incomes as factors in the surge. And, says Smith, "Nothing could be better news for (the housing industry). Consumers employed and earning unprecedented levels of income are driving housing market indicators to record levels."

The Realtors are forecasting growth in the real Gross Domestic Product will slow to 3.5 percent for 1999 from 3.9 percent last year, while consumer price inflation is expected to rise 1.8 percent for 1999, up from 1.5 percent last year.

Disposable income is expected to rise 3.4 percent this year, while unemployment is expected to dip to 4.2 percent in 1999 from 4.5 percent in 1998, according to the NAR forecast.

NAR's forecast for existing-home sales is for 4.75 million sales in 1999, down a slight 0.8 percent from last year's record of 4.79 million sales. New- home sales this year are expected to total 875,000 units, down 2.1 percent from 888,000 sales in 1998.

NAR predicts housing starts to total 1.62 million units this year, matching last year's volume.

Baby Boomers Sparking Time Share Sales

As more and more baby boomers turn 50 they are increasingly looking at, and investing in, vacation time share properties.

According to the American Resort Development Association, time share sales were up 12.4 percent last year as an estimated 300,000 families opted to secure housing at the nation's top vacation spots.

ARDA estimates that 2 million Americans now own time shares and predicts that number will increase. The average age of today's timeshare buyer is 49 years old. It is estimated that more than 75 million Americans will turn 50 during the next 20 years.

Homeownership Rate Rises to 66.7 Percent

America's homeownership rate rose to 66.7 percent for the first quarter of 1999, including a record number of African American and Hispanic families who own their own homes for the first time.

U.S. Census Bureau statistics showed the percentage of families owning their homes rose three-tenths of a percentage point, up from 66.4 percent in the fourth quarter of 1998. The Clinton Administration has set a target of 67.5 percent homeownership by the end of his term of office. A total of 69.6 million American families now own their own homes --more than at any time in American history.

BOMA Calls For Accelerated Superfund Site Cleanup

The Building Owners and Managers Association is again asking Congress to reform Superfund laws to accelerate the process of decontaminating hundreds of waste sites around the country.

According to BOMA, the current program has spent $25 billion -- but just 183 sites have been decontaminated.

BOMA says Congress needs to streamline the clean-up process so that more properties can be returned to active use in a quicker time frame. It also says it "is time to hold polluters responsible for their acts and provide innocent purchasers with the needed liability protection to redevelop contaminated lands."