In California, median home prices increased about 22 percent from 2003-04 after a 17.9 percent increase from 2002-03.
One out of every nine Americans is a Californian; by 2006, one out of every eight people will live in California. It’s the most populous state in the union, as well as the most urban. It also has one of the lowest affordability ratios in the country, as well as the lowest number of homeowners per the population. The housing market has seen double-digit increases for four years.
According to the California Association of Realtors chief economist Leslie Appleton-Young’s 2005 Housing Market Forecast, the median home price in California will increase 15 percent to $522,930 in 2005 compared with a projected median of $454,720 this year, while sales for 2005 are projected to reach 603,700 units, falling 2.5 percent compared with 2004.
The double-digit gain in the median price of a home will again be fueled by the continuing shortage of housing across much of the state, according to C.A.R. economists like Appleton-Young.
“We expect the economy in 2005 to generate modest growth in jobs both nationally and here in California, while productivity gains and competition will likely keep inflation in check next year, ” said Appleton-Young. “While the increase in interest rates will be enough to moderate the pace of home sales in 2005,population and household growth will continue to put pressure on home prices, resulting in greater price appreciation in California compared with the nation.”
More from the California Association of Realtors and the California Coalition For Rural Housing
