C.A.R. President on California Real Estate Forecast

2009 has been a thought-provoking year for the real estate industry in California, both for REALTORS® and for our clients. In many instances, it has been a year without precedent. Like most of you, I’ve wondered what 2010 will bring. Many of my questions and concerns were addressed at the opening luncheon during CALIFORNIA REALTOR® EXPO 2009. C.A.R. Vice President and Chief Economist Leslie Appleton-Young deftly navigated her way through the Association’s official forecast for the 2010 housing market, putting today’s market into historical perspective and setting the stage for the future.

The upshot is that, statewide, we can expect the median home price to rise 3.3 percent to $280,000 in 2010, while sales will moderate to a more sustainable pace, posting a 2.3 percent decrease next year. 2010 should mark the beginning of a “new normal” for California’s housing market, and 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.

C.A.R.’s forecast was widely reported in the news media, and we’ve posted our news release online.

The 2009 market presented a unique opportunity for first-time home buyers. Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide.

Unfortunately, the federal tax credit for first-time home buyers is set to expire next month on Nov. 30. Yet research shows that the First-time Home Buyer Tax Credit arguably has been the most successful component of the federal government's efforts to stimulate the U.S. economy. According to a study conducted by C.A.R. to gauge the role the federal tax credit played in the California market, nearly 40 percent of first-time home buyers reported they would not have purchased a home without the tax credit. Nearly 70 percent of recent first-time home buyers surveyed said the tax credit was "the most important" or a "very important" factor in their decision to buy a home.

Source: James Liptak
2009 President
CALIFORNIA ASSOCIATION OF REALTORS®