According the California Association of Realtors (CAR), home prices will increase in 2010 as the low-end market and foreclosures are bought up. This will also leave a shortage of homes as the inventory dries up.
The median California price will increase by 3.3% to $280,000 with sales decreasing by 2.3% to around $527,500, the latter occurring unless the first-time home buyers’ tax credit is extended.
In the low-end to moderate market prices have decreased about 50% in some places, while in the high-end market prices have not changed much but there are less buyers.
The forecast shows sales driven by distressed properties in the low-end market causing a shortage in the number of available homes and a slight price increase.
Higher priced homes will be difficult to sell because of the drop in prices and the difficulty to obtain financing.
It’s interesting that Fiserv is now forecasting a drop in national median home prices by over over 11%.
We are talking about California here. Different animal.