LOS ANGELES, Oct. 8, 2015 /PRNewswire-USNewswire/ -- California's housing market will continue to improve into 2016, but a shortage of homes on the market and a crimp in housing affordability also will persist, according to the CALIFORNIA ASSOCIATION OF REALTORS®' (C.A.R.) "2016 California Housing Market Forecast," released today.
The C.A.R. forecast sees an increase in existing home sales of 6.3 percent next year to reach 433,000 units, up from the projected 2015 sales figure of 407,500 homes sold. Sales in 2015 also will be up 6.3 percent from the 383,300 existing, single-family homes sold in 2014.
"Solid job growth and favorable interest rates will drive a strong demand for housing next year," said C.A.R. President Chris Kutzkey. "However, in regions where inventory is tight, such as the San Francisco Bay Area, sales growth could be limited by stiff market competition and diminishing housing affordability. On the other hand, demand in less expensive areas such as Solano County, the Central Valley, and Riverside/San Bernardino areas will remain strong thanks to solid job growth in warehousing, transportation, logistics, and manufacturing in these areas."
C.A.R.'s forecast projects growth in the U.S. Gross Domestic Product of 2.7 percent in 2016, after a projected gain of 2.4 percent in 2015. With nonfarm job growth of 2.3 percent in California, the state's unemployment rate should decrease to 5.5 percent in 2016 from 6.3 percent in 2015 and 7.5 percent in 2014.
The average for 30-year, fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels.
The California median home price is forecast to increase 3.2 percent to $491,300 in 2016, following a projected 6.5 percent increase in 2015 to $476,300. This is the slowest rate of price appreciation in five years.
"The foundation for California's housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "However, the global economic slowdown, financial market volatility, and the anticipation of higher interest rates are some of the challenges that may have an adverse impact on the market's momentum next year. Additionally, as we see more sales shift to inland regions of the state, the change in mix of sales will keep increases in the statewide median price tempered."
2016 CALIFORNIA HOUSING FORECAST
2016 CALIFORNIA HOUSING FORECAST
SFH Resales (000s)
Median Price ($000s)
Housing Affordability Index
p = projected f = forecast
Appleton-Young will present an expanded forecast Thursday afternoon during CALIFORNIA REALTOR® EXPO 2015, running Oct. 6-8 at the McEnery Convention Center in San Jose, Calif. The trade show attracts nearly 8,000 attendees and is the largest state real estate trade show in the nation. The remaining highlights of CALIFORNIA REALTOR® EXPO 2015 include:
Thursday, Oct. 8
1:45 p.m. – 3 p.m. CEO Fireside Chat C.A.R. CEO Joel Singer sits down with Redfin CEO Glenn Kelman for a very special thought leadership session about the state of today's housing market, what's next for third-party portals, and who will take what role moving forward. Presented by Joel Singer and Glenn Kelman.
Thursday Lunch: "2016 Housing Market Forecast with Leslie Appleton-Young" C.A.R. Chief Economist Leslie Appleton-Young will share valuable information and insight about next year's California housing market, including projected home sales, median prices, housing affordability, and mortgage rates and availability.
Journalists who would like to attend CALIFORNIA REALTOR® EXPO 2015, please email [email protected] or call (213) 739-8304. For more information on CALIFORNIA REALTOR® EXPO 2015, visit expo.car.org.
Leading the way ...® in real estate news and information for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.