Homes sales in California should increase for a third year in a row in 2013, rising about 1.3 percent to 530,000 homes, up from about 523,300 this year, and the median price should increase about 5.7 percent to $335,000, the California Association of Realtors said in a forecast.
Sales in 2012 are projected to be up 5.1 percent from the 497,900 existing, single-family homes sold in 2011.
"The market has improved moderately over the past year, and we expect that to continue into 2013,'' CAR president LeFrancis Arnold said in a statement.
"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.''
The forecast was based on a U.S. gross domestic product growth of 2.3 percent in the coming year, up from about 2 percent this year. Job growth in California is projected to be 1.6 percent, with unemployment dropping to 9.9 percent, from 11.7 percent in 2011 and 10.7 percent this year.
The average for 30-year fixed mortgage interest rates is projected to rise 4 percent after six consecutive years of declines, according to CAR.
After a drop in the median home price in 2011, this year's increase should come in around 10.9 percent, to about $317,000.
"The housing market momentum which began earlier this year will continue into 2013,'' said CAR vice president and chief economist Leslie Appleton-Young. "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.''
"The actions of underwater homeowners will play an important role in housing inventory next year, with rising home prices inducing some to stay put and others to list and move forward,'' she 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.''
From City News Service