Golden State expects 10% price surge
|October 11, 2002|
C.A.R.'s housing forecast predicts cooler sales pace with higher price-tags
Inman News Features
The median price of a single-family home in California will hit a new record in 2003 while sales will decrease slightly compared to this year's torrid pace, according to the California Association of Realtors 2003 housing forecast.
The median home price in California is expected to increase 10 percent to $344,300 next year, compared with $313,000 this year, while next year's sales are projected to drop 3 percent to 530,900 units.
C.A.R. expects price appreciation to be fueled in part by the continuing shortage of housing across much of the state. California typically adds 220,000 to 250,000 new households each year, but only builds about 150,000 new housing units annually, according to the report.
"The California housing market has been characterized by unprecedented sales activity and impressive price appreciation in 2002, and will remain strong into 2003 as it benefits from a recovering economy," said C.A.R. President Robert Bailey.
Bailey said the pace of home sales should return to more sustainable levels next year, while the overall health of the residential real estate market will depend on regional job growth and continued low interest rates in the coming months.
Home sales for California this year are expected to reach 547,300 units, largely as a result of the unusually high level of sales earlier in the year, and should eclipse the prior sales record of 537,830 set in 1999, according to C.A.R. economists. Sales activity this year has been spurred by the lowest mortgage rates in decades, despite the sluggish economy.
Housing market activity in the Central Valley and Southern California regions remained strong this year, while the San Francisco Bay Area housing market overall has rebounded strongly from a weak market in 2001, according to C.A.R.
C.A.R. VP and Chief Economist Leslie Appleton-Young said the state has weathered the economic slowdown of the past 18 months better than the nation, and expects job growth to outpace the nation as a whole in 2003.
Los Angeles-based C.A.R. is a state trade organization with more than 105,000 members dedicated to the advancement of professionalism in real estate.
Copyright: Inman News Service