SAN FRANCISCO -- The National Association of Realtors is expecting the fourth best year ever for existing home sales in 2001.

Projections released at NAR's annual convention here earlier this month call for only a slight 0.5 dip in resales, from 5.04 million this year to 5.01 million next year.

But the group is predicting a 5.5 percent decline in new home sales, from 882,000 to 833,000. The slowing economy “will hurt housing most in the higher price ranges,” Chief Economist David Lereah explained.

Overall, though, Mr. Lereah pronounced the housing sector “in relatively good shape” as the Federal Reserve Board continues to ride roughshod over economic growth.

“The economy's like a train, there's a lot of momentum and it would take an unusual combination of events to derail it,” the economist explained. “But with the Fed tapping on the breaks, we're expecting a soft landing in 2001.”

Mr. Lereah said that while any combination of factors could lead to a recession, a major downtown “at this juncture” is not on his or many other economists' radar screens.

“All the different economic indicators have slowed but consumers still have discretionary income to spend, and they are,” he said. “If anything, the Fed will remain in neutral through the winter, and if the economy slows too much after that, it could start easing again later in the year.”

NAR's outlook for mortgage rates is even more positive. After averaging about 8.1 percent for the year, Mr. Lereah thinks loan rates will hold fairly steady next year at the current 7.8 percent “with no significant movement.”

Such stability “should contribute” to level sales activity and help some localities avoid the shortfall of properties for sale that plagued them earlier this year, he added.

Despite the relatively strong prognosis, the economist doesn't believe a 70 percent home ownership rate is in the cards.

“We needed to have a great economic expansion with historically low rates just to get where we are now,” he pointed out, adding that 68 percent may be in the cards but not 70 percent.

Published: November 13, 2000

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.