If the experts are correct, California´s housing market will stay the course in 2013, with sales and prices continuing to increase slowly and steadily as they have for two years.
Interest rates remain at historic lows and home prices are still relatively affordable. However, while it’s an excellent time to buy, it’s not a simple time to do so, as banks aren’t making credit easily available, and many of those who purchased their homes at inflated prices several years ago aren’t inclined to sell just yet.
Still, surging demand is creating rumblings that we are about to witness a revival of the Golden State’s real estate market.
Chalk up the ongoing recovery in part to decreasing unemployment, according to the Long Beach Business Journal. The increased possibility of the need for office space is prompting build-outs in various parts of the state, it recently reported.
Meanwhile, home sales are expected to increase in California this year. In October, the California Association of Realtors released its 2013 California Housing Market Forecast, which saw sales increasing 1.3 percent next year to reach 530,000 units.
“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 LeFrancis Arnold, CAR president. “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.”
CAR predicted California´s 30-year fixed mortgage rates will rise slightly to 4 percent, which is still historically low.
Meanwhile, the association predicts the statewide median home price will increase by 5.7 percent to $335,000 in 2013.
CAR Vice President and Chief Economist Leslie Appleton-Young 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.¨
According to the December 2012 UCLA Anderson Forecast, a widely watched economic outlook for California and the rest of the United States, the national gross domestic product will grow at less than 2 percent per year through mid-2013. After that, the forecast report indicates that thanks to housing activity, growth will pick up, surpassing 3 percent for the majority of 2014.
In California, according to the report, employment will grow 1.3 percent in 2013 and 2.4 percent in 2014, while payrolls will grow at 1.4 percent and 2.2 percent respectively.
Meanwhile, the report projects real personal income growth to be 1.8 percent in 2013 followed by 3.1 percent in 2014.
As one of the first states to reel as a result of the housing bust, California also had further to fall than many other states. But even in the Bay area, where real estate prices were extraordinarily high, there are signs of a stronger market heartbeat. The Los Angeles Times reported that November median home prices in the Bay area rose to $438,000, 5.3 percent higher than those of the previous month. The Times added that November´s prices were up 20.5 percent over those of the previous year.
In late 2012, San Francisco´s median sales price was $728,000, 13 percent higher than the same period of time the year before. That spike in prices, according to the Times, is a result of a rallying economy, and more people flooding into the city for jobs or to launch businesses, straining the Bay area housing supply.
The Urban Land article headlined “San Francisco named top city in 2013 real estate forecast,” published in October, maintains that San Francisco recently replaced Washington D.C. as leader in the top Emerging Trends investment, development, and housing categories. The article reads in part, “The market is driven by growth and a strong jobs outlook, led by technology and a structural change away from suburban and toward downtown. Continued infill interest is supported by providing one of the best transit systems in the country and a city center with walkability that is number two only to New York City.”
The same article lists San Jose among the top five real estate markets to watch in 2013, reading, “In 2013, San Jose and the broader Silicon Valley are largely expected to generate jobs in a variety of fields, but most will revolve around the high technology firms. Industrial diversity is limited in San Jose and could be a concern for investors; however, the more than 6,600 technology companies based here employing over 225,000 people make it an area of interest.”
An article published Feb. 28, 2013 in the Sacramento Bee quoted Irvine-based housing market tracker RealtyTrac as indicating that foreclosure sales accounted for more than 38 percent of all residential sales in California last year. Although that was the highest percentage of foreclosed home sales in the nation in 2012, it was down 6 percent from 2011.
Regionally, San Jose is expected to see a 4 percent increase in its average home prices throughout 2013, while Oakland, Fremont, and Hayward are expected to see a collective 1 percent increase in 2013.
San Bernardino saw a 4 percent increase in home resale inventories from January 2013 to February 2013. However, the median listing price stayed the same.
As of early 2013, San Diego was experiencing a 12.2 percent increase in median home prices from the city’s lowest recorded prices during the real estate bust that started six years ago.
The National Association of Realtors is urging new construction to alleviate the problem of high demand and low supply. (Again, it isn’t that there is a low housing inventory – only that there aren’t enough homes for sale to meet demand.)
However, before construction can occur, credit must be more readily available, according to the NAR.
California Housing Market Predictions 2013
If the experts are correct, California´s housing market will stay the course in 2013, with sales and prices continuing to increase slowly and steadily as they have for two years.
Interest rates remain at historic lows and home prices are still relatively affordable. However, while it’s an excellent time to buy, it’s not a simple time to do so, as banks aren’t making credit easily available, and many of those who purchased their homes at inflated prices several years ago aren’t inclined to sell just yet.
Still, surging demand is creating rumblings that we are about to witness a revival of the Golden State’s real estate market.
Chalk up the ongoing recovery in part to decreasing unemployment, according to the Long Beach Business Journal. The increased possibility of the need for office space is prompting build-outs in various parts of the state, it recently reported.
Meanwhile, home sales are expected to increase in California this year. In October, the California Association of Realtors released its 2013 California Housing Market Forecast, which saw sales increasing 1.3 percent next year to reach 530,000 units.
“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 LeFrancis Arnold, CAR president. “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.”
CAR predicted California´s 30-year fixed mortgage rates will rise slightly to 4 percent, which is still historically low.
Meanwhile, the association predicts the statewide median home price will increase by 5.7 percent to $335,000 in 2013.
CAR Vice President and Chief Economist Leslie Appleton-Young 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.¨
According to the December 2012 UCLA Anderson Forecast, a widely watched economic outlook for California and the rest of the United States, the national gross domestic product will grow at less than 2 percent per year through mid-2013. After that, the forecast report indicates that thanks to housing activity, growth will pick up, surpassing 3 percent for the majority of 2014.
In California, according to the report, employment will grow 1.3 percent in 2013 and 2.4 percent in 2014, while payrolls will grow at 1.4 percent and 2.2 percent respectively.
Meanwhile, the report projects real personal income growth to be 1.8 percent in 2013 followed by 3.1 percent in 2014.
As one of the first states to reel as a result of the housing bust, California also had further to fall than many other states. But even in the Bay area, where real estate prices were extraordinarily high, there are signs of a stronger market heartbeat. The Los Angeles Times reported that November median home prices in the Bay area rose to $438,000, 5.3 percent higher than those of the previous month. The Times added that November´s prices were up 20.5 percent over those of the previous year.
In late 2012, San Francisco´s median sales price was $728,000, 13 percent higher than the same period of time the year before. That spike in prices, according to the Times, is a result of a rallying economy, and more people flooding into the city for jobs or to launch businesses, straining the Bay area housing supply.
The Urban Land article headlined “San Francisco named top city in 2013 real estate forecast,” published in October, maintains that San Francisco recently replaced Washington D.C. as leader in the top Emerging Trends investment, development, and housing categories. The article reads in part, “The market is driven by growth and a strong jobs outlook, led by technology and a structural change away from suburban and toward downtown. Continued infill interest is supported by providing one of the best transit systems in the country and a city center with walkability that is number two only to New York City.”
The same article lists San Jose among the top five real estate markets to watch in 2013, reading, “In 2013, San Jose and the broader Silicon Valley are largely expected to generate jobs in a variety of fields, but most will revolve around the high technology firms. Industrial diversity is limited in San Jose and could be a concern for investors; however, the more than 6,600 technology companies based here employing over 225,000 people make it an area of interest.”
An article published Feb. 28, 2013 in the Sacramento Bee quoted Irvine-based housing market tracker RealtyTrac as indicating that foreclosure sales accounted for more than 38 percent of all residential sales in California last year. Although that was the highest percentage of foreclosed home sales in the nation in 2012, it was down 6 percent from 2011.
Regionally, San Jose is expected to see a 4 percent increase in its average home prices throughout 2013, while Oakland, Fremont, and Hayward are expected to see a collective 1 percent increase in 2013.
San Bernardino saw a 4 percent increase in home resale inventories from January 2013 to February 2013. However, the median listing price stayed the same.
As of early 2013, San Diego was experiencing a 12.2 percent increase in median home prices from the city’s lowest recorded prices during the real estate bust that started six years ago.
The National Association of Realtors is urging new construction to alleviate the problem of high demand and low supply. (Again, it isn’t that there is a low housing inventory – only that there aren’t enough homes for sale to meet demand.)
However, before construction can occur, credit must be more readily available, according to the NAR.
Click here for 2012 Predictions