2006 gearing up to be another sizzling year.

RE/MAX Chairman, Dave Liniger predicts 2006 will be the second best year the real estate industry has ever experienced.

After reviewing 2005 year-end data, released thsi week, Liniger observed that the past year was clearly the best he'd ever seen, and 2006 will likely continue the winning ways.

The real estate figures across New York State were also strong during 2005 and RE/MAX of New York President Henry Weber agrees that 2006 has the potential to be another exceptional year.

Liniger stated that 2005 was the culmination of a historical trend, resulting from several economic factors, "2005 was the fifth year in a row that records were set. What's happened is the economy has been fueled by the real estate market, which has shown continued strength."

Year-end National Association of Realtors[R] data revealed that, in 2005, existing homes sales were 7,072,000, an increase of 4.2 percent over 2004. The figures show that 2005 also saw a record increase in the median price of an existing home. The national median price rose from $185,200 in 2004 to $208,700 in 2005.

Rather than predicting an ominous decline in the housing market, Liniger feels that 2006 will only see a moderate correction.

In New York State, Weber concurs with Liniger's assessment. "New York State has many diverse real estate markets," he said. "In some areas, such as New York City, Long Island and in the Hudson Valley, we continue to see strong growth. Some parts of the state may show a modest correction, but our figures continue to indicate the real estate market is vibrant."

Liniger commented on the state of real estate and the housing market after NAR released its Existing-Home-Sales data for December, and a preliminary year-end summary.

The December data showed a decrease of 5.7 percent to a seasonally adjusted annual rate of 6.60 million units in December from an upwardly revised pace of 7.00 million in November. Sales were 3.1 percent lower than the 6.81 million-unit level in December 2004.

But the RE/MAX chairman feels the real estate market is in for another banner year. He said, "I don't think the last two months are anything worse than a normal cycle of the real estate business. November and December declines were a normal reaction to fluctuating interest rates. This year we would anticipate that resales will probably drop 4 to 5 percent from the record pace that they were last year.

"Even with the recently announced interest rate increase, the real estate market should not be negatively impacted. Rates remain very low and demand for housing in New York continues to be high. Inventory levels have remained constant in most regions of the state, demonstrating that the re-sale market is continuing to move forward as we predicted.

Prices for existing home sales may retreat more in some parts of the country, but for most regions, Liniger does not expect the dramatic collapse in prices predicted by some observers. He believes 2006 will be best described as the-year-of-the-correction, adding, "We're getting back to a much more normal real estate market. You're going to see price appreciation, depending upon the region you're in, somewhere between three and six percent."

In New York, Weber sees the correction occurring regionally. "With the record breaking growth over the past few years it would be hard to keep up such a pace for many more years. In some areas we may see corrections, similar to what Liniger predicts of six percent and possibly slightly more in areas where valuations have grown by more than 60 or 70 percent over the past two or three years."

One of the reasons that the housing market has been on a record setting pace is historically low interest rates. Liniger believes that rates may climb somewhat in the upcoming year, but not enough to derail the real estate market. "I think you're looking at reasonable rates in the neighborhood of six-point-five percent before the year is over."

As far as real estate trends in 2006, Liniger says to watch the baby-boomers. They'll continue to keep the market hot. "They see real estate being a very, solid investment, unlike recent experiences in the stock market. So, I think you're going to see second home sales continue to be very, very strong."

While most sellers did extremely well in 2005 Liniger expects part of the normalization process will mean the market may shift a little more in favor of the buyer. "There won't be as many people standing in line to buy, and prices won't go up dramatically. In 2006 we feel it will be a little easier for the buyers in the marketplace."

Liniger cautions that each individual market has its own specific economics, and it's always tricky to make the perfect deal. "You can't time the real estate market, just like you can't time the stock market but overall, unemployment and interest rates are still very low which makes conditions ripe for an excellent real estate market. I feel confident that real estate will continue to lead the economy in 2006."