Realtors Forecasting Extent of Housing Bubble

Industry trade group says existing home sales and prices should steady in 2007.

After slowing sharply in 2006, the housing market will coast along in 2007, according to a forecast released Friday by the National Association of Realtors (NAR), the industry's largest trade group.

NAR forecasts that existing home sales will fall 8.6 percent this year, to 6.47 million, still the third highest total ever. For 2007, NAR is calling for sales of 6.43 million, a decline of 0.6 percent. New home sales, which account for about 15 percent of the housing market, are a different story. NAR expects sales of these to plummet 16.8 percent in 2006 to 1.07 million units, and another 8.7 percent next year to 975,000.

New home sales might be even worse except that sellers are offering "more competitive pricing, in addition to some favorable incentives or concessions," said David Lereah, chief economist for NAR.

Expanding inventories will depress prices in both new and existing homes but NAR is still predicting the median price of an existing, single-family home will increase 1.9 percent this year to $223,700 and 1.7 percent next year to $227,500.

New home prices should drop 1.1 percent this year to $238,400, before gaining ground next year, up 1.3 percent to $241,400.

Accounting for a portion of NAR's fairly rosy housing market forecast is their mortgage interest rate prediction; it expects rates to be very stable in 2007, with a 30-year fixed rate mortgage only inching up from 6.4 percent this autumn to 6.6 percent in the spring.

The organization also expects unemployment and inflation to be stable, which could help pave the way for housing markets to recover.

Microsoft Stresses That Vista Users Will Need Anti-Virus

Microsoft's co-president of Platforms and Services, is clarifying some of his earlier statements by saying that most Windows Vista users will need some form of antivirus. During a telephone conference with reporters last week, Allchin described how the computer his seven-year-old son doesn't have antivirus software. Some media reports inferred that Vista doesn't need antivirus software, something Allchin has denied on his Microsoft Vista blog entry.

In the entry, Allchin says, "I want to be clear, most users will use some form of antivirus software, and that will be appropriate for their scenarios. In fact, Windows Security Center, a great feature in Windows Vista, specifically encourages the use of antivirus software."

According to Allchin, his son's machine is an example of how effective parental controls can be in locking down a computer. He says the machine doesn't have access to email or instant messaging and that his son cannot run as administrator. This combination allows Allchin to run without antivirus software on that machine only.

Parental controls are one of many of the new features in Windows Vista. Parents can limit the types of programs their children can use, along with the times a computer can be accessed. Back in June, Chris Donahue, Microsoft's Group Manger for Games, stopped by our offices and demonstrated parental gaming controls. You can read the article and view the video demonstration in the link below.

Google Chief Sees Free Cell Phones With Advertising

Google Inc’s chief executive, Eric Schmidt, sees a future where mobile phones are free to consumers who accept watching targeted forms of advertising.

Schmidt has said as mobile phones become more like handheld computers and consumers spend as much as eight to 10 hours a day talking, texting and using the Web on these devices, advertising becomes a viable form of subsidy. “Your mobile phone should be free,” Schmidt said. “It just makes sense that subsidies should increase” as advertising rises on mobile phones.

He was interviewed following a speech on the theme of business innovation organised by Italian student groups and the Graduate School of Business at Stanford University. Schmidt also said his company was working on how to allow users to maintain basic control of their personal data.

Google stores consumer data on hundreds of thousands of its own computers to provide additional services to individual users. The company is looking to allow consumers to export their Web search history or e-mail archives and move them to other sites, if they so choose. “We are working to ensure that as long as it is yours, we want to give you the equivalent of number portability,” Schmidt said at another conference earlier this week.