C.A.R says NO in their 2008 Housing Market Forecast
The Sacramento Real Estate market will not perform as well in 2008 as most of the state, so says the California Association of Realtors in their Housing Market Forecast for 2008. C.A.R. believes the more affordable markets, Sacramento, Central California and the Inland Empire will experience greater softness in the resale market because of the large number of new homes coming onto the market in recent years.
For the less upper end markets, C.A.R. Chief Economist Leslie Appleton-Young said, “Higher priced regions of the state, such as the San Francisco Bay Area and parts of San Diego, Los Angeles, and Orange counties will react more to affordability constraints.”
Overall C.A.R is projecting home prices to decline 4 percent from their projected median price to $553,000 in 2008 with sales down 9 percent to 334,500 units sold. The forecast was not broken down by region.
“Tighter credit standards, affordability concerns, and a continued standoff between buyers and sellers will contribute to continued weakness in the market going into next year,” said C.A.R. President Colleen Badagliacco. “Now is not the time for homeowners to test the waters, only serious sellers should put their homes on the market in what will continue to be a challenging sales environment.”
The report went on to say the lower priced markets including Sacramento will continue to face fallout from the subprime crisis, tighter underwriting standards and competition from new home developments where price-cutting has been severe. The higher price range markets, especially those with over $1 million median prices will experience less stress.
Overall the report, which is to be released today at the C.A.R. trade show in Anaheim, is not good news for our Sacramento real estate market. One of the strengths or our market, the relative affordability of homes compared to other urban areas of California may be the driving factor in another difficult year for home sellers. The key line in the report and even more important here than most other parts of the state is only serious sellers should put their homes on the market.
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