After experiencing its sharpest decline in history, California Association of REALTORS® officials say they expect the median price to rise modestly next year, but they say foreclosures, the unemployment rate and what the federal government does to stem both will impact the 2010 housing market.
"California's housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market," said C.A.R. President James Liptak. "This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace."
Liptak predicted 2010 will mark the beginning of the "new normal" for California's housing market. "This 'new normal' likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation," Liptak said.
The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
In Silicon Valley, sellers at the high end continue to be challenged by the ability of home buyers to secure financing, said Julia Truesdale Keady, president of the Silicon Valley Association of REALTORS®. "The federal tax credit has helped more than a million first-time homebuyers nationwide. We hope Congress can extend the tax credit and expand it to all buyers, as this will most certainly stimulate the market further and bring repeat buyers back to the fold," Keady said.
C.A.R. and Vice President Leslie Appleton-Young said she expects the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer.
"Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year," Appleton-Young said. "The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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