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| C.A.R.'s California Housing Market Forecast for 2004: Record-Setting Run-Up in Median Home Price to Continue, Sales to Moderate From Record Levels This Year |
SAN DIEGO, Oct. 2 /PRNewswire/ -- The median price of a single-family home
in California will reach a new record again next year, while sales will
decline from this year's record setting pace, according to the California
Association of REALTORS(R) "2004 Housing Market Forecast" released today.
The median home price in California will increase 13.0 percent to $414,100
in 2004 compared to $366,450 this year, while sales for 2004 are projected to
reach 548,500 units, falling 4.5 percent compared to 2003. The double-digit
gain in the median price of a home, which California has experienced for the
past 4 years, will again be fueled by the continuing shortage of housing
across much of the state, according to C.A.R. economists. California
typically gains nearly 250,000 new households, yet only will build about
190,000 new housing units this year, creating a shortfall of about 60,000
units.
"While mortgage interest rates will remain near their historic lows next
year, it won't be enough to mitigate affordability concerns in most regions of
the state," said C.A.R. President Toby Bradley. "Housing affordability in
California will continue to be negatively impacted by rising home prices in
2004 and relatively slow growth in household income."
"We expect C.A.R.'s Housing Affordability Index to fall 8 points next year
to 19," she said. "At that level, less than one in five households will be
able to purchase a median priced home in California. That's a cause for
concern as we move forward."
Home sales for California in 2003 are expected to reach a record 574,300
units, surpassing the prior sales record of 572,550 set in 2002, according to
C.A.R. economists.
"While the torrid pace of home sales will moderate next year, 2004 will
likely be the third strongest housing market in the history of the Golden
State," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.
"Southern California and the Central Valley have fared better economically
in recent years than the San Francisco Bay Area, so it's no surprise that
their respective housing markets have outperformed those in the Bay Area," she
said. "Even so, the Bay Area median price remained the highest in the state."
"Continued strong demographics suggest that 2004 will be yet another
robust year for real estate activity in Southern California and the Central
Valley," Appleton-Young said. "The success of the housing market in the San
Francisco Bay Area is closely aligned with the performance of the technology
sector."
Appleton-Young will deliver her highly anticipated forecast today during
C.A.R.'s California REALTOR(R) EXPO 2003 in San Diego, Calif. The convention
and trade show attracts more than 7,000 attendees.
The California Association of REALTORS(R) ( http://www.car.org ) is one of
the largest state trade organizations in the United States, with more than
130,000 members dedicated to the advancement of professionalism in real
estate. C.A.R. is headquartered in Los Angeles.
2004 FORECAST FACT SHEET
2002 2003 2004
CALIFORNIA ECONOMY
Unemployment rate 6.7 6.7 6.4
Job Growth -0.8 -0.3% 1.0%
Population Change 1.5% 1.5% 1.5%
Single-Family Resales 572,550 574,300 548,500
% Change 13.5 0.3 -4.5
Single Family Median Price $315,900 $366,450 $414,100
% Change 19.0% 16.0% 13.0%
SOURCE California Association of REALTORS
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CONTACT:
Mark Giberson of California Association of
REALTORS, +1-213-739-8304, markg@car.org
