California Home Prices Predicted To Fall

Home prices are slowly declining across the country as we trudge through our nation’s housing market slowdown.

Home values that skyrocketed in record numbers and prices are now starting to slowly fall back down to earth; causing buyers to stand still and wait to see just how low they will go.

California is one of the country’s states that are most experiencing the slowdown and all of its glory, and it’s most apparent in its declining prices.

Now Realtors are pretty much in agreement in that they are forecasting home prices to fall even more in 2007.

According to an October 19, 2006 article featured in The Contra Costa Times, “Housing prices to fall slightly in ’07, Realtors say,” sellers should be prepared to lower asking prices as the market continues to correct itself.

Although Realtors are predicting a further decline in the New Year, it may not be as bad as most people are led to believe.

“Housing prices are expected to drop 2 percent in California, but the market should be slightly better in pockets of the Bay Area where the housing supply is tighter, according to the state Association of Realtors.”

Although 2 percent does not sound like very much, it will have an impact on current figures.

“On a statewide basis, the median price next year for an existing single-family house is expected to drop 2 percent to $550,000 compared with a projected median of $561,000 for 2006. Home sales are expected to drop 7 percent to 447,500 from projected 2006 levels of 481,200, according to an outlook released Wednesday by the association at a convention in Long Beach.”

The Bay Area seems like it is going to come out on top of the housing market, but our very own San Diego could be amongst the areas that are going to be the hardest hit.

This is probably due to the fact that the San Diego area had some of the biggest and fastest rates of home price appreciation during the housing boom, so as the saying goes, what goes up must come down.

“The Central Valley, the wine country, the San Diego area and the Riverside/San Bernardino regions could see an even bigger drop in home sales compared with the rest of California, according to the association's report.”

Most experts agree that the housing market slowdown is a result of the buyer and the seller not seeing eye-to-eye. Buyers want the cheapest prices and sellers don’t want to lower their prices.

“Sellers are hoping to reap the kind of sales price that was attainable during the sizzling market of previous years while buyers are looking to take advantage of the current slowing market, according to Vince Malta, president of the association. 'The sellers have one idea: They are hoping to cash out at the top. And buyers are saying, 'Now it's time to take advantage of the market.' That didn't happen,' he said. 'We can never outsmart the market.'”