The California housing market is in for a slowdown next year.
Home sales will rise modestly in 2015 and prices are expected to flatten out marking the slowest price gain in four years, said Leslie Appleton-Young, vice president and chief economist for the California Association of Realtors.
And forget about that rumored rise in mortgage interest rates. During the trade group’s 2015 California Housing Market Forecast on Tuesday, Appleton-Young projects only a slight increase to 4.5% from 4.3% this year.
“The forecast is always for higher rates,” Appleton-Young said. “Our look next year is that we don’t see rates going up very much.”
Here’s what you can expect: a better year for first-time homebuyers, fewer investors, more inventory and a friendlier lending environment.
“That may be boring to some, but might be a good pause for people who might have gotten exhausted by multiple offers and competition over the last couple of years,” Appleton Young said.
Here’s some other key points:
• Home sales are expected to increase 5.8% next year to about 402,500 units sold compared to a projected 380,500 homes sold this year.
• The statewide median home price is forecast to increase 5.2% to $478,700 following a projected 11.8% increase this year to $455,000.
• The number of foreclosure properties is falling. In Tulare, for example, 19% of the properties sold were foreclosures compared to 47% two years ago.
• In Fresno, the median home price in August was $203,760, a 55% increase, from $131,070 in January 2012, the lowest point of the economic cycle.