LOS ANGELES--(BUSINESS WIRE)--With more available homes on the market for sale, California’s housing market will see fewer investors and a return to traditional home buyers as home sales rise modestly and prices flatten out in 2015, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2015 California Housing Market Forecast,” released today.
The C.A.R. forecast sees an increase in existing home sales of 5.8 percent next year to reach 402,500 units, up from the projected 2014 sales figure of 380,500 homes sold. Sales in 2014 will be down 8.2 percent from the 414,300 existing, single-family homes sold in 2013.
“Stringent underwriting guidelines and double-digit home price increases over the past two years have significantly impacted housing affordability in California, forcing some buyers to delay their home purchase,” said C.A.R. President Kevin Brown. “However, next year, home price gains will slow, allowing would-be buyers who have been saving for a down payment to be in a better financial position to make a home purchase.”
“Moreover, prospective buyers should know that it's a misperception that a 20 percent down payment is always required to buy a home. There are numerous programs available that allow consumers to buy a home with less down payment, including FHA loans, which lets buyers put down as little as 3.5 percent,” continued Brown.
C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 3 percent in 2015, after a projected gain of 2.2 percent in 2014. With nonfarm job growth of 2.2 percent in California, the state’s unemployment rate should decrease to 5.8 percent in 2015 from 6.2 percent in 2014 and 7.4 percent in 2013.
The average for 30-year fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels.
The California median home price is forecast to increase 5.2 percent to $478,700 in 2015, following a projected 11.8 percent increase in 2014 to $455,000. This is the slowest rate of price appreciation in four years.
“With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While the Fed will likely end its quantitative easing program by the end of this year, it has had minimal impact on interest rates, which should only inch up slightly and remain low throughout 2015. This should help moderate the decline in housing affordability we saw occur over the past two years.”
Additionally, the state will continue to see a bifurcated market, with the San Francisco Bay Area outperforming other regions, thanks to a more vigorous job market and tighter housing supply.
Appleton-Young will present an expanded forecast Thursday afternoon during CALIFORNIA REALTOR® EXPO 2014, running Oct. 7-9 at the Anaheim Convention Center in Anaheim, Calif. The trade show attracts nearly 8,000 attendees and is the largest state real estate trade show in the nation.
2015 CALIFORNIA HOUSING FORECAST
|SFH Resales (000s)||474.9||416.5||422.6||439.8||414.3||380.5||402.5|
|Median Price ($000s)||$||275.0||$||305.0||$||286.0||$||319.3||$||407.2||$||455.0||$||478.7|
|Housing Affordability Index||51||%||48||%||53||%||51||%||36||%||30||%||27||%|
p = projected
f = forecast
Highlights of CALIFORNIA REALTOR® EXPO 2014 include:
Tuesday, Oct. 7
“Who wants to Be a Millionaire?” (2:45 p.m. – 3:45 p.m.)
Get a glimpse inside the minds of top-ranking California agents as they share how they approach each day’s work, motivation strategies, and their business philosophies. REALTORS® will walk away with applicable tips, renewed energy, and a little insight into their money-making mindsets. Featuring some of California’s top producers, this insightful panel will be moderated by C.A.R. CEO Joel Singer.
Wednesday, Oct. 8
“Long Story Short: A Detailed Look at Housing’s Future” (10 a.m.
– 11:30 a.m.)
Step inside the minds of such top California economists as Richard Green, Christopher Thornberg, Joel Singer, and Selma Hepp to discuss what factors will most impact the future of California housing. Moderated by C.A.R. Vice President and Chief Economist Leslie Appleton-Young, the panel will cover timely issues such as demographics, housing finance, current infrastructure, and the state of both California and the nation’s economy.
Wednesday Lunch: “Leadership without Ego, with Capt. Chesley
Sullenberger” (noon – 1:30 p.m.)
Captain of the “Miracle on the Hudson,” and author of New York Times bestseller “Highest Duty,” Chesley “Sully” Sullenberger, shares his take on leadership after surviving and saving 155 lives during the famous “Miracle on the Hudson” plane landing.
Thursday, Oct. 9
Thursday Lunch: “2015 Housing Market Forecast with Leslie
Appleton-Young” (noon – 1:30 p.m.)
C.A.R. Chief Economist Leslie Appleton-Young will share valuable information and insight about next year’s California housing market, including projected home sales, median prices, housing affordability, and mortgage rates, and availability.
Journalists who would like to attend CALIFORNIA REALTOR® EXPO 2015, please email email@example.com or call (213) 739-8304. For more information on CALIFORNIA REALTOR® EXPO 2015, visit http://expo.car.org.
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 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.