This past week I have been attending meetings at the California Realtors Expo in Long Beach to get a better idea what is happening in the real estate market. This column outlines what is going on throughout the state, next week I will talk specifically about Lake County.
After distressed sales lost their hold on much of California”s market, the state”s housing market will continue to improve next year, with sales shifting toward primary home buyers and both sales and home prices posting further gains, according to the recently released California Association of Realtors (CAR) 2014 California Housing Market Forecast.
The CAR forecast sees sales gaining 3.2 percent next year to reach 444,000 units, up from the projected 2013 sales figure of 430,300. Sales in 2013 will be down 2.1 percent from the 439,400 existing, single-family homes sold in 2012.
“The housing market has improved over the past year, and we expect this trend to continue into 2014,” CAR President Don Faught said. “As the economy enters the fourth year of a modest recovery, we expect to see a strong demand for homeownership, as buyers who may have been competing with investors and facing an extreme shortage of available housing return from the sidelines.”
CARs forecast also projects growth in the U.S. Gross Domestic Product by 2.8 percent in 2014, after a projected gain of 1.8 percent in 2013. With nonfarm jobs growing by 1.9 percent in California, the state”s unemployment rate should decrease to 8.3 percent in 2014 from 9 percent in 2013 and 10.5 percent in 2012.
The average for 30-year fixed mortgage interest rates will rise to 5.3 percent but will still remain at historically low levels.
The California median home price is forecasted to increase by 6 percent to $432,800 in 2014, following a projected 28 percent increase in 2013 to $408,600.
“We”ve seen a marked improvement in housing market conditions in a year with the distressed market shrinking from one in three sales a year ago to less than one-in-five in recent months, thanks primarily to sharp gains in home prices,” CAR Vice President and Chief Economist Leslie Appleton-Young said. “As the market continues to improve, more previously underwater homeowners will look toward selling, making housing inventory less scarce in 2014. As a result of these factors, we”ll see home price increases moderate from the double-digit increases we saw for much of this year to mid-single digits in most of the state.”
“The wildcards for 2014 include federal, fiscal, monetary and housing policies ? such as the mortgage interest deduction and mortgage finance reform ? as well as housing supply and the actions of the Federal Reserve, which will ensure a higher rate environment,” Appleton-Young continued.
Appleton-Young presented an expanded forecast last Thursday afternoon during the expo. The trade show attracts nearly 8,000 attendees and is the largest state real estate trade show in the nation.
Editor”s Note: Ray Perry is the past president of the Lake County Association of Realtors and works for CPS Country Air Properties located in the Riviera Shopping Center. He can be reached at 277-8000.
