Industry News

Red-hot real estate markets cool down

Markets brace for slowdown, return to normalcy

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In 2005, home sellers will have to price their properties judiciously instead of expecting offers beyond their wildest dreams on the first day of listing, according to Christopher Cagan's market analysis and forecast. Buyers will look at many houses before placing a bid and will negotiate more with sellers. In Cagan's view, these are not signs of a crashing real estate market, but more of a raging fire returning to normal temperatures. Cagan, director of research and analytics at First American Real Estate Solutions, outlined his argument and supporting data in a new study, "Has the fire burned out? The return to a normal market." Housing price appreciation will slow down over the next few years, but Cagan sees no reason to worry about a bubble. "This is basically the business cycle," Cagan said. "This is not a stock market crash, there's no reason to panic or run for the exits." In his study, Cagan charted, graphed and mapped internal data and numbers from the California Association ...