Housing prices in California real estate are trending downward despite a small summer upswing. While prices are predicted to fall nearly 20% in 2009 for many markets, there are signs that the environment is stabilizing across the state. See the following article from Housing Predictor for more on this.
Tourists are returning, overseas exports are rising and housing prices in some areas of California are stabilizing, if not just temporarily. It’s been a tough downturn for the nation’s most populated state but signs of an economy that is making strides towards improving are growing.
As California battles back from the brink of economic failure, employment levels will be the most heavily watched single index. Without a growing job base the housing market will sustain further damage with increasing foreclosures, which have set records in just about every part of the state.
Improving home sales in Los Angeles have shown strength due to lower prices, the first time buyers’ tax credit and one of the largest foreclosure inventories in the country. But the slow down in foreclosed properties available for sale has also impacted the market as bankers delay foreclosing on homes. When foreclosures rise the market will see more activity.
Until the federal government takes major steps to at least cut the number of foreclosures there’s no end in sight to the housing mess. Greater Los Angeles area home prices have risen slightly on a month over month basis, but are forecast to deflate an average of 18.2% for the whole year.
Fewer foreclosures on the market in Riverside, one of the epicenters of the housing bust, have meant slower home sales. But in neighboring San Bernardino and Ontario the markets that make up the Inland Empire may be showing the initial signs of stabilizing after prices have fallen nearly four years. With higher sales attributed to bargain priced foreclosures, the Inland Empire, however, will still finish the year with housing deflation forecast at an average of 19.1%.
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The volume of sales has risen in Orange Country, especially in the lower price ranges, which has resulted in slightly better home prices. But financing that’s still tight is wearing on the higher end of the market, and a balance will have to be reached before a full recovery will be sustained. Although home values are eking upward the overall trend has been a deflating market through the year, forecast to fall an average of 17.1% in 2009.
Local California Housing Markets at a Glance
|Los Angeles||− 18.2%|
|Inland Empire||− 19.1%|
|San Diego||− 16.1%|
|San Jose||− 16.7%|
|Orange County||− 17.1%|
San Diego has also experienced rising home sales, where the economy was sent into a tailspin from the financial crisis. As one of the most highly regarded communities in the country for its year round sunshine and rich Pacific coastline, the housing crash may be coming to an end in San Diego. Homeowners can expect to begin to see more stabilization through the rest of the year even as home values deflate in many areas, and are forecast to experience average housing deflation of 16.1% for the entire year.
Home sales in San Francisco and most of the Bay Area have been improving, but a lack of bank owned bargain priced homes has slowed the pace of sales, which is likely to last the remainder of the year. San Francisco is on a course to see home values deflate for sometime before improving. Deflation is forecast to hit an average of 17.6% in 2009 in “The City.”
In San Jose the market is hard hit with foreclosures projected to rise through at least mid-2010. Prices didn’t hit their peak in San Jose and the rest of the Bay Area until after Southern California, which will delay the recovery. San Jose is forecast to deflate an average of 16.7% in 2009.
In the east bay, Oakland is dealing with high levels of homeowners walking away from mortgages as many are unable to qualify to refinance their homes. Although home and condo sales have seen an improving trend, values are still declining in most market sectors and are forecast to deflate 18.2% on average for the year.
More bargain priced homes sold in Fresno until foreclosures became tougher to get. The Central Valley is another victim of the foreclosure epidemic. Fresno is forecast to sustain average housing deflation of 20.2% in 2009. Down the road in Bakersfield hundreds of homes sit vacant awaiting foreclosure. The housing mess will take years to work through Bakersfield like a lot of other areas in the Golden State, and is forecast to sustain average deflation of 19.3% for the year.
Stabilizing forces are beginning to dominate the state’s capitol of Sacramento. As prices decline more new home buyers are taking advantage of the market. Sacramento is one of the hardest hit areas in California, and increasing sales are welcome news as lawmakers propose solutions for the crisis. Prices will be rising steadily again some day in Sacramento. Just not for a while. Sacramento is forecast to deflate an average of 15.7% in 2009.
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.