2010 California Housing Forecast Released
INDUSTRY NEWS
October 8th, 2009
Lead economist for the California Association of Realtors (CAR) addressed agents from across California at the annual convention in San Jose. Leslie Appleton-Young predicted home prices in California to increse 3.3% in 2010 to a median price of $280,000. However, the number of housing units sold is expected to decline 2.3% to 527,500 units compared to 540,000 units projected for 2009.
CAR President Jim Liptak added “California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming on the market. 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.” He went on to say “2010 will mark the beginning of a ‘new normal’ for California’s housing market”. He expects demand for low-end priced distress properties to drive a “steady stream of sales”.
Leslie expects distress sales to represent 1/3 of sales activity and supply to be lean in the winter and increase in the peak buying season. Leslie also likes to list wild cards that can derail her forecasts. These include “foreclosures, loan resets, the labor market, the California budget crisis and actions by the federal government.”
She may be referring to the fact banks are sitting on many foreclosed properties which could impact supply and demand depending on when and how many are placed for sale in 2010. The loan resets she is referring to are for Alt-Aloans that are the next tier up from subprime loans. Most of the subprime loans, made to buyers with low credit scores, have either been refinanced or foreclosed upon.
Now we are dealing with the next group, Alt-A loans, which fall between the prime and subprime loan categories. Unemployment could cause even the most credit worthy buyers to lose their homes due to income loss or reduction. California’s budget woes could spur more taxation pushing more people and businesses from California. Federal programs assisting homeowners underwater with loan modifications or tax credits for home buyers can impact next years sales activity.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
CORNER OF COURT AND PLACER IN REDDING
QUARTER CENTURY LOCAL SALES EXPERIENCE
