"While mortgage interest rates will remain near their historic lows next year, it won't be enough to mitigate affordability concerns in most regions of the state," said C.A.R. President Toby Bradley. "Housing affordability in California will continue to be negatively impacted by rising home prices in 2004 and relatively slow growth in household income.
"We expect C.A.R.'s Housing Affordability Index to fall 8 points next year to 19," she said. "At that level, less than one in five households will be able to purchase a median priced home in California. That's a cause for concern as we move forward."
Home sales for California in 2003 are expected to reach a record 574,300 units, surpassing the prior sales record of 572,550 set in 2002, according to C.A.R. economists.
"While the torrid pace of home sales will moderate next year, 2004 will likely be the third strongest housing market in the history of the Golden State," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.
"Southern California and the Central Valley have fared better economically in recent years than the San Francisco Bay Area, so it's no surprise that their respective housing markets have outperformed those in the Bay Area," she said. "Even so, the Bay Area median price remained the highest in the state."
"Continued strong demographics suggest that 2004 will be yet another robust year for real estate activity in Southern California and the Central Valley," Appleton-Young said. "The success of the housing market in the San Francisco Bay Area is closely aligned with the performance of the technology sector."
Appleton-Young will deliver her highly anticipated forecast today during C.A.R.'s California REALTOR® EXPO 2003 in San Diego, Calif. The convention and trade show attracts more than 7,000 attendees.
The California Association of REALTORS® (http://www.car.org) is one of the largest state trade organizations in the United States, with more than 130,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
2004 FORECAST FACT SHEET
|
| 2002 | 2003 | 2004 |
| CALIFORNIA ECONOMY |
|
|
|
| Unemployment rate | 6.7 | 6.7 | 6.4 |
| Job Growth | -0.8 | -0.3% | 1.0% |
| Population Change | 1.5% | 1.5% | 1.5% |
|
|
|
| |
| Single-Family Resales | 572,550 | 574,300 | 548,500 |
| % Change | 13.5 | 0.3 | -4.5 |
| Single Family Median Price | $315,900 | $366,450 | $414,100 |
| % Change | 19.0% | 16.0% | 13.0% |
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