What will be the trend in housing prices 1 year from now in CA?

Answer 1

Obviously no one has a crystal ball but the economic consensus says that prices have flattened out now and may fall after the first of the year. If interest rates remain low and buyers stop sitting on their hands the lower prices may bring them out. After the 1st of the year we'll see if people start buying again.

Answer 2

First of all, realize that housing markets in NorCal and SoCal are two completely different animals, with little in common in terms of trends or underlying drivers. Economies are different, job markets are different, demand and supply are different.

That being said, here in NorCal (the only market I'm familiar with and follow with interest) the firm seller's market and staggering appreciation have slowed down. Trends are no longer for sellers to expect multiple offers above asking price. Buyers want more and more work credited in the deal. Open houses are more plentiful and listings are sitting on market for longer.

But the doomsday voices of the "bubble bursting", homes losing 10% of their value, etc. are blowing smoke up our skirts. The market will autocorrect away from the unhealthy extremes, but demand is still very strong, with statistical evidence that millions of homebuyers still want to live in the SF Bay Area (SF, Peninsula, Silicon Valley, East Bay, even Solano County).

So while the market may seem "flat" relative to the inferno of 1.5 years ago, it will still be a strong demand, overbalanced market from the relative perspective of the rest of the country.

Just my opinion, hope this helps you some.

Answer 3

in my opinion, where the cost of home ownership greatly exceeds the rent for like units, prices will fall. Where the cost is the same or lower, prices will track with rents or may go up. In many urban areas in Socal (LA, San Diego), the cost of ownership greatly exceeds rental rates, so prices are due for a decline there. (again, just my opinion)

I'm not a real estate professional, but have been investing in RE for over 10 years

Answer 4

Southern California housing market is already negative in year over year medium price. So, we don't need to address it separately.

Let's talk about the San Francisco Bay area.

SF Bay area housing market has been resisting declines prompted by inventory build up and rates hike. However, it is going through the early stage of correction. It is likely to take a couple years to resolve.

During 1990's there were times when housing market in SF Bay area went negative. It started in 1990 and sellers, who entered the market at that time, had to wait until 1997 to unload their property with a gain.

Today, in 2006, we are in the early stage of another housing correction . Please see this page:
http://www.viewfromsiliconvalley.com/id157.html

The "Year over Year" medium price for San Mateo is -2.0%. If we consider inflation, then that is -5.5%. Because inflation tops 3.5%. For Santa Clara county, the gain is only 1.7%. That is lowest ever in the past 5 years. If we count inflation in our valuation, then it is -1.8%.

In addition, sales volumn drops dramatically, which means high end properties garnished most of sales, keeping the medium price high. While less appealing properties stays on the market longer and longer.

Inventories build up as sales down. Inventory for single family grew to 2222 units in July from 1500 in January this year. Condo inventory grew from 658 to 841 units by July from January.

Frankly, as summer selling season is over, I don't know how the market can take care of so many sellers.

Finally, a couple more examples:
If you go to http://www.mlslistings.com/, the listing MLS#: 648284 dropped their asking price from $565 to $535 in one month. This property locates in Sunnyvale, the heart of Silicon Valley.

If you follow this link, this fellow needs help selling his condo in Northen Cal.

http://answers.yahoo.com/question/index;_ylt=AqB3Src5MZhmZvLzjoyH5GPzy6IX?qid=20060918081440AAnWjCn

Answer 5

down 3-10% a year