California housing market to continue improvement; lack of inventory to hamper sales
LOS ANGELES (Oct. 2) – California’s housing market will continue
to recover in 2013, as home sales are forecast to increase for the third
consecutive year and the median price to rise for the second straight
year, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.)
“2013 California Housing Market Forecast,” released today.
The C.A.R. forecast sees sales gaining 1.3 percent next year to reach
530,000 units, up from the projected 2012 sales figure of 523,300 homes
sold. Sales in 2012 will be up 5.1 percent from the 497,900 existing,
single-family homes sold in 2011.
“The market has improved moderately over the past year, and we expect
that to continue into 2013,” said C.A.R. President LeFrancis Arnold.
“Sales would be even higher if inventory were less constrained in
REO-dominated markets, particularly in the Central Valley and Inland
Empire, where there is an extreme shortage of available homes. Sales
will be stronger in higher-priced areas, where there are more equity
properties and a somewhat greater availability of homes for sale.”
“Housing affordability has never been stronger – with record-low
interest rates and favorable home prices, combining to create a
once-in-a-generation opportunity to buy a home in California,” said
Arnold.
C.A.R.’s forecast projected growth in the U.S. Gross Domestic Product of
2.3 percent in 2013, after a gain of 2 percent in 2012. With job
growth of 1.6 percent in California, the state’s unemployment rate
should decrease to 9.9 percent in 2013 from 11.7 percent in 2011 and
10.7 percent in 2012.
The average for 30-year fixed mortgage interest rates will edge up to 4
percent after six consecutive years of declines, but will still remain
historically low.
The statewide median home price is forecast to increase a moderate 5.7
percent to $335,000 in 2013. Following a decrease in 2011, the
California median home price will climb a projected 10.9 percent in 2012
to $317,000.
“The housing market momentum which began earlier
this year will continue into 2013,” said C.A.R. Vice President and Chief
Economist Leslie Appleton-Young. “Pent-up demand from first-time
buyers will compete with investors and all-cash offers on lower-priced
properties, while multiple offers and aggressive bidding will continue
to be the norm in mid- to upper-price range homes.”
“The actions of underwater homeowners will play an important role in
housing inventory next year, with rising home prices inducing some to
stay put and others to list and move forward,” she said.
“The wildcards for 2013 include federal, monetary and housing policies,
state and local government finances, housing supply, and the actions of
underwater homeowners – not to mention the strength of the overall
economic recovery,” Appleton-Young continued.
Appleton-Young will present an expanded forecast Wednesday afternoon
during CALIFORNIA REALTOR® EXPO 2012 (http://expo.car.org), running from
Oct. 2-4 at the Anaheim Convention Center in Anaheim, Calif. The trade
show attracts nearly 6,500 attendees and is the largest state real
estate trade show in the nation.
Also, don’t miss “Housing Market Trends: What’s Next for Real Estate,”
during CALIFORNIA REALTOR® EXPO 2012. C.A.R.’s Chief Economist Leslie
Appleton-Young and C.A.R. Senior Economist Selma Hepp will moderate a
panel of renowned experts as they discuss future market trends and
front- and center issues facing the market and REALTORS® next year. The
panel is scheduled to be held Thursday, Oct. 4, from 2 p.m. – 3:30 p.m.
at the Anaheim Convention Center.
2013 CALIFORNIA HOUSING FORECAST
|
|
2008 |
2009 |
2010 |
2011 |
2012f |
2013f |
|
SFH Resales (000s) |
441.8 |
546.9 |
492.3 |
497.9 |
523.3 |
530.0 |
|
% Change |
27.3% |
23.8% |
-10.0% |
1.1% |
5.1% |
1.3% |
|
Median Price ($000s) |
$348.5 |
$275.0 |
$305.0 |
$286.0 |
$317.0 |
$335.0 |
|
% Change |
-37.8% |
-21.1% |
10.9% |
-6.2% |
10.9% |
5.7% |
|
30-Yr FRM |
6.0% |
5.1% |
4.7% |
4.5% |
3.8% |
4.0% |
|
1-Yr ARM |
5.2% |
4.7% |
3.5% |
3.0% |
2.8% |
2.8% |
f = forecast
Leading the way...® in California real estate for more than 100 years,
the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the
largest state trade organizations in the United States, with more than
155,000 members dedicated to the advancement of professionalism in real
estate. C.A.R. is headquartered in Los Angeles.
"Builders are reporting increasing demand for new homes as inventories of foreclosed and distressed properties begin to shrink in markets across the country," says NAHB Chair Barry Rutenberg. "In view of the tightening supply and other improving conditions, many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today's favorable prices and interest rates." 
