Home Front

A blog about the economy and the Sacramento-area real estate market.

October 7, 2009
California housing in 2010: key trade group makes forecast
Thursday update: Here is the full story published today. JW.

What's next year bringing to California's housing market?
The California Association of Realtors just released its 2010 forecast in front of several hundred real estate agents gathered in San Jose - but don't be surprised if it changes.
 Given all the "wild cards" that may - or may not happen - who knows for sure.

But first a couple foundations:

  • 2010 sales will likely fall below this year, when they were fueled by an explosion of relatively cheap bank repos attractive to first-time buyers and investors. CAR, the trade group for  172,000 real estate agents, predicts sales of 527,500 homes in 2010 - 2.3 percent fewer than this year. 
  • Median prices will rise slightly. CAR  estimates a 2010 median price of $280,000. That's 3.3 percent higher than this year's current estimate of $271,000.

     Beyond that we get to the wild cards: the state budget crisis that has cut hundreds of thousands of salaries across California, whether a new round of expected loan resets among Option ARMS and Alt-A loans will drive a new stream of foreclosures and whether rising joblessness will do the same. What will the federal government do? Will it extend, or even expand, its $8,000 tax credit for first-time buyers?
 Like other baffled analysts, CAR isn't sure what the banks are doing, either, as they continue to drag out foreclosure schedules and remain slow to put their thousands of repo listings on the market. A heavier-than-expected wave of foreclosures, if it happens, would drive prices back down, said CAR's Chief Economist Leslie Appleton-Young.

 Yet, in a phone conversation this morning with Home Front, she said, " I don't see a tsunami of foreclosures. I see an elevated level of foreclosures over the next couple of years, and an acceleration in the rate of foreclosures at the upper end of the market."

 Problems in the upper end of the market are also part of the reason for expectations of fewer sales next year. Buyers are still finding it harder to get loans for those houses, and are especially skittish about buying in that segment for fear that prices are going to fall. Much of the joblessness now is hitting in the higher end of the market, and a stream of foreclosures there could cause the same deflation that first struck the lower end,said Appleton-Young.

Bottom line: "distress sale" properties that have this year accounted for slightly over half of existing homes sales across the Golden State are likely to be close to one-third of sales next year, said Appleton-Young. We'll have a full print version of all this in Thursday's Bee

About Comments

Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "report abuse" button below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.

What You Should Know About Comments on Sacbee.com

Sacbee.com is happy to provide a forum for reader interaction, discussion, feedback and reaction to our stories. However, we reserve the right to delete inappropriate comments or ban users who can't play nice. (See our full terms of service here.)

Here are some rules of the road:

• Keep your comments civil. Don't insult one another or the subjects of our articles. If you think a comment violates our guidelines click the "report abuse" button to notify the moderators. Responding to the comment will only encourage bad behavior.

• Don't use profanities, vulgarities or hate speech. This is a general interest news site. Sometimes, there are children present. Don't say anything in a way you wouldn't want your own child to hear.

• Do not attack other users; focus your comments on issues, not individuals.

• Stay on topic. Only post comments relevant to the article at hand. If you want to discuss an issue with a specific user, click on his profile name and send him a direct message.

• Do not copy and paste outside material into the comment box.

• Don't repeat the same comment over and over. We heard you the first time.

• Do not use the commenting system for advertising. That's spam and it isn't allowed.

• Don't use all capital letters. That's akin to yelling and not appreciated by the audience.

You should also know that The Sacramento Bee does not screen comments before they are posted. You are more likely to see inappropriate comments before our staff does, so we ask that you click the "report abuse" button to submit those comments for moderator review. You also may notify us via email at feedback@sacbee.com. Note the headline on which the comment is made and tell us the profile name of the user who made the comment. Remember, comment moderation is subjective. You may find some material objectionable that we won't and vice versa.

If you submit a comment, the user name of your account will appear along with it. Users cannot remove their own comments once they have submitted them, but you may ask our staff to retract one of your comments by sending an email to feedback@sacbee.com. Again, make sure you note the headline on which the comment is made and tell us your profile name.

hide comments

On October 14, The Sacramento Bee will temporarily remove commenting from sacbee.com. While we design the upgrade, we encourage you to tell us what you like and don't like about commenting on sacbee.com and other websites. We've heard from hundreds of you already and we're listening. Please continue to add your thoughts and questions here. We also encourage you to write Letters to the Editor on this and other topics.

Jim Wasserman on Twitter

Follow "jimwasserman" on Twitter

October 2013

Sun Mon Tue Wed Thu Fri Sat
    1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31