There is good news forecasted for the West Coast in 2013. The California Association of Realtors expects the state's housing market to continue its recovery effort next year with improved home sales and a rise in home prices.
The state’s real estate trade organization is predicting that home sales will rise by 1.3% next year to reach 530,000 units, up from the projected 2012 sales figure of 523,000 homes sold.
“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 extreme shortage of available homes,” said LeFrancis Arnold, president of the California Association of Realtors.
Arnold sees more sales happening in higher-priced areas where there are more equity properties and a greater supply of inventory available on the market.
Meanwhile, the statewide median home price is estimated to increase 5.7% to $335,000 next year. In 2012, the average value for a California property is $317,000, which would be 10.9% more than the year before.
With job growth of 1.6% in the Golden State, the state’s unemployment rate is calculated to decrease to 9.9% in 2013. This would be down substantially from 2011 and 2012, where the rate was 11.7% and 10.7%, respectively.
Even though the average 30-year fixed mortgage interest rate is projected to rise to 4% after six consecutive years of declines, it will still remain at historically low rates, which will only help the state’s housing growth.
“The housing market momentum which began earlier this year will continue in 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.”
Lastly, Appleton-Young noted that there are several “wildcards” that will impact the
“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 added.
