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C.A.R.'s California Housing Market Forecast for
2008:Statewide median price down, pace of sales
decline moderates after tumultuous 2007
LOS ANGELES (Oct. 10) – Home prices throughout most of California will post
modest declines next year while sales of existing homes will stabilize from the
precipitous decrease experienced in 2007, according to the CALIFORNIA
ASSOCIATION OF REALTORS® (C.A.R.) "2008 California Housing Market
Forecast" released today. The forecast will be presented this afternoon during
the CALIFORNIA REALTOR® EXPO 2007 (www.realtorexpo.org), running
from Oct. 9-11 at the Anaheim Convention Center in Anaheim, Calif. The trade
show attracts nearly 12,000 attendees and is the largest state real estate trade
show in the nation.
The median home price in California will decline 4 percent to $553,000 in 2008
compared with a projected median of $576,000 this year, while sales for 2008
are projected to decrease 9 percent to 334,500 units, compared with 367,500
units (projected) in 2007.
“Tighter credit standards, affordability concerns, and a continued standoff
between buyers and sellers will contribute to continued weakness in the market
going into next year,” said C.A.R. President Colleen Badagliacco. “Now is not
the time for homeowners to ‘test the waters’ – only serious sellers should put
their homes on the market in what will continue to be a challenging sales
environment.”
“Sales could decline more steeply in 2008 if the current liquidity crunch in the
mortgage markets has a longer-than-expected duration or if interest rates
unexpectedly increase,” she said
“Geographically, more affordable regions such as the Central Valley and
Inland Empire will experience greater softness in the resale market because of
the large number of new homes coming onto the market in recent years,” said
C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Higher
priced regions of the state, such as the San Francisco Bay Area and parts of
San Diego, Los Angeles, and Orange counties will react more to affordability
constraints.”
“By price-range, the highest-priced markets – those with medians over $1
million -- will show less stress,” she said. “The lower-priced markets will
continue to face fallout from the subprime crisis, tighter underwriting standards,
and competition from new home developments where price-cutting has been
even more severe.”
C.A.R. economists also projected a 23 percent decline in sales this year to
367,500 units compared with 2006, and a 3.5 percent increase in the statewide
median price to $576,000. However, the projected increase in the 2007
statewide median stands in contrast to the situation in most counties, regions,
and communities of the state, where slight to modest year-to-year percentage
declines have become more prevalent and will continue next year.
Historically, the last time the sales level fell below 2007’s projected 367,500
units occurred in 1995, when annual sales totaled 342,540 units. Sales last fell
below 2008’s 334,500-unit forecast in 1985, with 328,270 units. The last time
the statewide median price fell was a 0.5 percent decline in 1996. The most
recent statewide median price decline greater than 4 percent was a 4.5 percent
decline in 1993.
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 nearly 200,000
members dedicated to the advancement of professionalism in real estate.
C.A.R. is headquartered in Los Angeles.
Download PDF for tables.
C.A.R.'s California Housing Market Forecast for
2008:Statewide median price down, pace of sales
decline moderates after tumultuous 2007
LOS ANGELES (Oct. 10) – Home prices throughout most of California will post
modest declines next year while sales of existing homes will stabilize from the
precipitous decrease experienced in 2007, according to the CALIFORNIA
ASSOCIATION OF REALTORS® (C.A.R.) "2008 California Housing Market
Forecast" released today. The forecast will be presented this afternoon during
the CALIFORNIA REALTOR® EXPO 2007 (www.realtorexpo.org), running
from Oct. 9-11 at the Anaheim Convention Center in Anaheim, Calif. The trade
show attracts nearly 12,000 attendees and is the largest state real estate trade
show in the nation.
The median home price in California will decline 4 percent to $553,000 in 2008
compared with a projected median of $576,000 this year, while sales for 2008
are projected to decrease 9 percent to 334,500 units, compared with 367,500
units (projected) in 2007.
“Tighter credit standards, affordability concerns, and a continued standoff
between buyers and sellers will contribute to continued weakness in the market
going into next year,” said C.A.R. President Colleen Badagliacco. “Now is not
the time for homeowners to ‘test the waters’ – only serious sellers should put
their homes on the market in what will continue to be a challenging sales
environment.”
“Sales could decline more steeply in 2008 if the current liquidity crunch in the
mortgage markets has a longer-than-expected duration or if interest rates
unexpectedly increase,” she said
“Geographically, more affordable regions such as the Central Valley and
Inland Empire will experience greater softness in the resale market because of
the large number of new homes coming onto the market in recent years,” said
C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Higher
priced regions of the state, such as the San Francisco Bay Area and parts of
San Diego, Los Angeles, and Orange counties will react more to affordability
constraints.”
“By price-range, the highest-priced markets – those with medians over $1
million -- will show less stress,” she said. “The lower-priced markets will
continue to face fallout from the subprime crisis, tighter underwriting standards,
and competition from new home developments where price-cutting has been
even more severe.”
C.A.R. economists also projected a 23 percent decline in sales this year to
367,500 units compared with 2006, and a 3.5 percent increase in the statewide
median price to $576,000. However, the projected increase in the 2007
statewide median stands in contrast to the situation in most counties, regions,
and communities of the state, where slight to modest year-to-year percentage
declines have become more prevalent and will continue next year.
Historically, the last time the sales level fell below 2007’s projected 367,500
units occurred in 1995, when annual sales totaled 342,540 units. Sales last fell
below 2008’s 334,500-unit forecast in 1985, with 328,270 units. The last time
the statewide median price fell was a 0.5 percent decline in 1996. The most
recent statewide median price decline greater than 4 percent was a 4.5 percent
decline in 1993.
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 nearly 200,000
members dedicated to the advancement of professionalism in real estate.
C.A.R. is headquartered in Los Angeles.
Download PDF for tables.
