C.A.R. releases its 2017 California Housing Market Forecast
Home sales expected to edge up slightly in 2017, while prices post slowest gain in six years
LOS ANGELES, Sept. 29, 2016 /PRNewswire-USNewswire/ -- Following a dip in home sales in 2016, California's housing market will post a nominal increase in 2017, as supply shortages and affordability constraints hamper market activity, according to the "2017 California Housing Market Forecast," released today by the CALIFORNIA ASSOCIATION OF REALTORS®' (C.A.R.).
The C.A.R. forecast sees a modest increase in existing home sales of 1.4 percent next year to reach 413,000 units, up slightly from the projected 2016 sales figure of 407,300 homes sold. Sales in 2016 also will be virtually flat at 407,300 existing, single-family home sales, compared with the 408,800 pace of homes sold in 2015.
"Next year, California's housing market will be driven by tight housing supplies and the lowest housing affordability in six years," said C.A.R. President Pat "Ziggy" Zicarelli. "The market will experience regional differences, with more affordable areas, such as the Inland Empire and Central Valley, outperforming the urban coastal centers, where high home prices and a limited availability of homes on the market will hamper sales. As a result, the Southern California and Central Valley regions will see moderate sales increases, while the San Francisco Bay Area will experience a decline as home buyers migrate to peripheral cities with more affordable options."
C.A.R.'s forecast projects growth in the U.S. Gross Domestic Product of 2.2 percent in 2017, after a projected gain of 1.5 percent in 2016. With California's nonfarm job growth at 1.6 percent, down from a projected 2.3 percent in 2016, the state's unemployment rate will reach 5.3 percent in 2017, compared with 5.5 percent in 2016 and 6.2 percent in 2015.
The average for 30-year, fixed mortgage interest rates will rise only slightly to 4.0 percent in 2017, up from 3.6 percent in 2016, but will still remain at historically low levels.
The California median home price is forecast to increase 4.3 percent to $525,600 in 2017, following a projected 6.2 percent increase in 2016 to $503,900, representing the slowest rate of price appreciation in six years.
"With the California economy continuing to outperform the nation, the demand for housing will remain robust even with supply and affordability constraints still very much in evidence. The net result will be California's housing market posting a modest increase in 2017," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "The underlying fundamentals continue to support overall home sales growth, but headwinds, such as global economic uncertainty and deteriorating housing affordability, will temper stronger sales activity."
| 2017 CALIFORNIA HOUSING FORECAST |
|||||||
| 2011 |
2012 |
2013 |
2014 |
2015 |
2016p |
2017f |
|
| SFH Resales (000s) |
422.6 |
439.8 |
414.9 |
382.7 |
408.8 |
407.3 |
413.0 |
| % Change |
1.4% |
4.1% |
-5.9% |
-7.8% |
6.8% |
-0.4% |
1.4% |
| Median Price ($000s) |
$286.0 |
$319.3 |
$407.2 |
$446.9 |
$474.4 |
$503.9 |
$525.6 |
| % Change |
-6.2% |
11.6% |
27.5% |
9.8% |
6.2% |
6.2% |
4.3% |
| Housing Affordability Index |
53% |
51% |
36% |
30% |
31% |
33% |
29% |
| 30-Yr FRM |
4.5% |
3.7% |
4.0% |
4.2% |
3.9% |
3.6% |
4.0% |
| Regional housing forecasts |
||||
| Southern California |
2014 |
2015 |
2016p |
2017f |
| SFH Resales % Change |
-8.9% |
7.2% |
0.4% |
0.7% |
| Median Price ($000s) |
$435.3 |
$461.3 |
$486.0 |
$501.5 |
| Median Price % Change |
9.6% |
6.0% |
5.4% |
3.2% |
| San Francisco Bay Area |
2014 |
2015 |
2016p |
2017f |
| SFH Resales % Change |
-5.6% |
3.8% |
-6.4% |
-5.6% |
| Median Price ($000s) |
$683.3 |
$737.6 |
$783.7 |
$833.6 |
| Median Price % Change |
10.7% |
8.0% |
6.2% |
6.4% |
| Central Valley |
2014 |
2015 |
2016p |
2017f |
| SFH Resales % Change |
-7.1% |
9.9% |
3.7% |
2.2% |
| Median Price ($000s) |
$245.0 |
$265.6 |
$283.0 |
$294.6 |
| Median Price % Change |
13.0% |
8.4% |
6.6% |
4.1% |
| p = projected |
| f = forecast |
Appleton-Young will present an expanded forecast at a luncheon Thursday afternoon during CALIFORNIA REALTOR® EXPO 2016, running Sept. 27-29 at the Long Beach Convention Center in Long Beach, 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 2016 include:
Thursday, Sept. 29
10:45 a.m. – 11:30 a.m.
Building Your Brand to Last with Egypt Sherrod
Egypt Sherrod, host of HGTV's "Flipping Virgins" and "Property Virgins," will help attendees understand the importance of building a brand that lasts. They'll learn how to identify their value proposition, develop and transcend their personal brand, and build their brand.
12 noon – 1:30 p.m.
Thursday Lunch: "2017 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, inventory supply, and mortgage rates and availability. (Ticketed event)
Journalists who would like to attend CALIFORNIA REALTOR® EXPO 2016, please email [email protected] or call (213) 739-8304. For more information on CALIFORNIA REALTOR® EXPO 2016, 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 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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SOURCE CALIFORNIA ASSOCIATION OF REALTORS
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