California home sales and prices to rise in 2014 as market transitions toward primary home buyers
LOS ANGELES (Oct. 8) – After distressed sales lost their hold on much of California’s market, the state’s housing market will continue to improve in 2014, with sales shifting toward primary home buyers and both sales and home prices posting further gains, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2014 California Housing Market Forecast,” released today.
The C.A.R. forecast sees sales gaining 3.2 percent next year to reach 444,000 units, up from the projected 2013 sales figure of 430,300 homes sold. Sales in 2013 will be down 2.1 percent from the 439,400 existing, single-family homes sold in 2012.
“The housing market has improved over the past year, and we expect this trend to continue into 2014,” said C.A.R. President Don Faught. “As the economy enters the fourth year of a modest recovery, we expect to see a strong demand for homeownership, as buyers who may have been competing with investors and facing an extreme shortage of available housing return from the sidelines.”
C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 2.8 percent in 2014, after a projected gain of 1.8 percent in 2013. With nonfarm job growth of 1.9 percent in California, the state’s unemployment rate should decrease to 8.3 percent in 2014 from 9 percent in 2013 and 10.5 percent in 2012.
The average for 30-year fixed mortgage interest rates will rise to 5.3 percent but will still remain at historically low levels.
The California median home price is forecast to increase 6 percent to $432,800 in 2014, following a projected 28 percent increase in 2013 to $408,600.
“We’ve seen a marked improvement in housing market conditions in a year with the distressed market shrinking from one in three sales a year ago to less than one in five in recent months, thanks primarily to sharp gains in home prices,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “As the market continues to improve, more previously underwater homeowners will look toward selling, making housing inventory less scarce in 2014. As a result of these factors, we’ll see home price increases moderate from the double-digit increases we saw for much of this year to mid-single digits in most of the state.”
“The wildcards for 2014 include federal, fiscal, monetary and housing policies – such as the mortgage interest deduction and mortgage finance reform – as well as housing supply and the actions of the Federal Reserve, which will ensure a higher rate environment,” Appleton-Young continued.
Appleton-Young will present an expanded forecast Thursday afternoon during CALIFORNIA REALTOR® EXPO 2013 (http://expo.car.org), running from Oct. 8-10 at the Long Beach Convention Center in Long Beach, Calif. The trade show attracts nearly 8,000 attendees and is the largest state real estate trade show in the nation.
Also at REALTOR® EXPO 2013, don’t miss “Understanding Today’s Consumer: The Impact of Demographic Trends”- REALTORS® who grasp the state’s changing consumer makeup will have the upper hand in understanding how to appeal to emerging clients. Will the American Dream of homeownership undergo a change in perception among the American populace as it grows increasingly diverse? Presented by C.A.R.’s brand new Thought Leadership Program and moderated by C.A.R. CEO Joel Singer, the session features panelists Dowell Myers, Riva Froymovich, and Susan Brown.
A second Thought Leadership Program on Thursday discusses “Tomorrow’s Housing: The Future of California Real Estate” - Will future housing markets and public policy reflect the needs and desires of an increasingly diverse client base? Will the American Dream be redefined in the years to come with respect to homeownership? Panelists Joel Kotkin, Joe Mathews, and Perry Wong, will provide the answers to these questions and more. CEO Joel Singer will moderate.
Journalists who would like to attend CALIFORNIA REALTOR® EXPO 2013, please email Lotus Lou at email@example.com or call (213) 739-8304. For more information on CALIFORNIA REALTOR® EXPO 2013, visit http://expo.car.org.
2014 CALIFORNIA HOUSING FORECAST
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Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.