California’s housing market has fallen farther and faster this year than many leading economists expected, and it appears the worst is not over, according to a new outlook from a leading trade group reports the San Francisco Chronicle.
Tighter lending standards, unrealistic prices and a standoff between home buyers and sellers are expected to drive prices and sales even lower in 2008 after a surprisingly weak 2007 made weaker by the lending crisis.
The median price for resales of single-family homes will drop to $553,000 in 2008, 4 percent less than the estimated $576,000 this year. That would be the first statewide decrease in 11 years and the largest drop since 1993, according to an annual forecast released Wednesday by the California Association of Realtors.
The number of transactions is expected to tumble 9 percent, to 334,500 - a 46 percent plunge from the peak sales figure of 625,000 two years ago.
“2008 is going to be a rocky road,” said Robert Kleinhenz, an economist for the trade group. He noted that the dismal sales projection “is one of the weakest numbers we’ve seen in a long time.”
“It’s not clear we’re out of the woods where the credit crunch is concerned. We saw a slight impact in our August sales figures, but we’re seeing September sales with a much more dramatic impact.”
Read it here: State Housing Market Agony