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C.A.R. FORECASTS HOME PRICE APPRECIATION TO CONTINUE, SALES TO MODERATE IN 2004
| The median price of a single-family home in California will reach a new record again next year, while sales will decline from this year's record setting pace, according to C.A.R.'s "2004 Housing Market Forecast" released last Thursday at the California REALTOR® EXPO 2003 in San Diego. The median home price in California will increase 13.0 percent to $414,100 in 2004 compared to $366,450 this year, while sales for 2004 are projected to reach 548,500 units, falling 4.5 percent compared to 2003. The double-digit gain in the median price of a home, which California has experienced for the past three years, will again be fueled by the continuing shortage of housing across much of the state, according to C.A.R. economists. California typically gains nearly 250,000 new households, yet only will build about 190,000 new housing units this year, creating a shortfall of about 60,000 units. "While mortgage interest rates will remain near their historic lows next year, it won't be enough to mitigate affordability concerns in most regions of the state," said C.A.R. President Toby Bradley. "Housing affordability in California will continue to be negatively impacted by rising home prices in 2004 and relatively slow growth in household income. We expect C.A.R.'s Housing Affordability Index to fall 8 points next year to 19. At that level, less than one in five households will be able to purchase a median priced home in California. That's a cause for concern as we move forward." Home sales for California in 2003 are expected to reach a record 574,300 units, surpassing the prior sales record of 572,550 set in 2002, according to C.A.R. economists. |