California Housing Market Forecast for 2010 ( From C.A.R.)
California Association of Realtors (C.A.R.) Releases California Housing Market Forecast for 2010
California's housing market continued its strong sales rebound this year resulting from the continued pace of distressed properties coming to the market," said C.A.R. President James Liptak. "This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace."
"After experiencing its sharpest decline in history, we expect the median price to rise moderately over the next year," Liptak added. "2010 will mark the beginning of the 'new normal' for California's housing market. This 'new normal' will likely feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation."
The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
"Housing in California has become a tale of two markets," Liptak said. "The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes that will be availble for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed. While demand from first-time buyers for low-end properties will continue throughout next year, sales could be impacted if discretionary sellers do not return to the market by the second half of 2010."
"2009 marked a unique opportunity for first-time buyers, " Liptak said. "Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide. Now is the time for Congress to extend the Federal tax credit and expand it to all buyers, not just first-timers."
"With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and roughly a four month supply during the peak season," said C.A.R. Vice President and chief economist Leslie Appleton-Young. "We expect the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer. For the year as a whole, home prices are forecast to reach a median of $280,000."
"Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to the market next year," she said.