View a video of California Association of REALTORS® Vice President and Chief Economist, Leslie Appleton-Young.
While the worst is over, the market continues to struggle with not much relief in sight. The economy started to gain a bit of traction in the beginning of 2011, but things happened one after another – Japan’s earthquake and tsunami, oil price spikes, uprisings in the Middle East, stock market volatility, the U.S. debt and the debt crisis in the euro zone. As a result, the housing market that appeared to be recovering is now stalled.
The forecast for California home sales next year is for a slight 1 percent increase to 496,200 units, following essentially flat sales of 491,100 homes this year compared to the 491,500 homes sold in 2010.
C.A.R. (California Association of Realtors) expects the median price to hit $291,000 by the end of 2011 and to increase 1.7 percent to $296,000 in 2012. C.A.R. expects 491,000 unit sales by year-end and 496,000 unit sales in 2012, just a 1 percent increase from this year. California’s median price was $287,440 in September, down 8.3 percent from September 2010, but way above from when it bottomed in February 2009 at $245,230.
Lenders aren’t lending and consumer and entrepreneurial confidence continue to be low. As long as the jobs problem continues, she doesn’t expect consumer spending to improve by much.
“2012 will be another transition year for the California housing market, as the continued uncertainty about the U.S. financial system, job growth, and the stability of the overall economy remain in the forefront for all market participants,” said Appleton-Young. “An improvement in job growth, consumer spending, and corresponding gains in housing are essential to a broader recovery in the economy, but would-be buyers will remain cautious as they weigh these myriad uncertainties against the clear opportunities presented by today’s very affordable housing market.”