The housing recovery in California is expected to continue through to 2013, but the market won't be fully "corrected" until as far off as 2017, according to the California Housing Market Forecast released by the CAR.
As most of you know, the Bay Area is a very special place. While the rest of the country has been recovering, I think it is more accurate to say the Bay Area housing market has exploded over the last 18 to 24 months. Most listings are selling with multiple offers and WAY over list price. In some markets, we have seen prices increase by as much as 20 to 30 percent in just the last 18 months. Many areas are seeing prices at all time highs.
Remember however, the housing market in the Bay Area is like the weather and varies widely depending on where you are. If you want to know what is going on in your market feel free to ping me an email, send me a text or give me a call.
- Homes sales and prices are expected to keep rising, but lower-than-normal inventory levels and underwater mortgages are key hindrances to a faster recovery, according to Leslie Appleton-Young, chief economist with the CALIFORNIA ASSOCIATION OF REALTORS®.
- Home sales are forecasted to rise 1.3 percent to 530,000 units next year, based on the projected tally of 523,300 units this year. That's a slower growth than that of 2011 to 2012, which is roughly 5 percent.
- The momentum in prices also is expected to carry through to 2013, a result of pent-up demand for a limited housing supply. The median price could rise 5.7 percent to $335,000 in 2013. That's lower than the projected price growth from 2011 to 2012, an estimated 11 percent.
- “Pent-up demand from first-time buyers will compete with investors and all-cash offers on lower-priced properties, while multiple offers and aggressive bidding will continue to be the norm in mid- to upper-price range homes,” said Appleton-Young in the report.
- Appleton-Young says what underwater borrowers throughout the state will do — be it selling or holding — will have a big effect on next year's housing recovery.
- Other things to watch next year that will have a bearing on the housing market include: policies related to the state, local and federal governments; and housing and monetary policies, Appleton-Young said.
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