Thursday, October 9, 2014

REAL ESTATE: Slower gains predicted in 2015 for home sales, prices

My website: www.sandralew.com

Real estate is taking shape of a more traditional market for 2015 as we transition to a slower price appreciation environment. The slow down in price gains should help would be buyers to get into the market. It helps improve market affordability as housing inventory continues to improve and a modest uptrend for 2015 is predicted rather than in past few years of median home prices rising as much as 27.5 percent.

REAL ESTATE: Slower gains predicted in 2015 for home sales, prices

Boost in inventory will lead to modest upward trends, economist says.

 BY DEBRA GRUSZECKI / STAFF WRITER  Published: Oct. 7, 2014 Updated: Oct. 8, 2014 1:17 p.m.

Reset, California.

That could be the theme of a real estate forecast that California Association of Realtors chief economist Leslie Appleton-Young delivered Tuesday for 2015, as the real estate industry takes the shape of a more traditional market.

Next year promises to be far less frothy than it has been when it comes to price.

The association’s forecast is projecting a 5.8 percent increase in existing home sales in 2015 to 402,500 units. Median home price for California is expected to rise 5.2 percent to $478,700 in 2015, less than half the projected 11.8 percent rate in 2014.

Sales in 2014 will be down 8.2 percent from the 414,300 existing single-family homes sold in 2013, the state trade association said.

“We are transitioning into a slower price appreciation environment,” Appleton-Young acknowledged in a conference call.

The real estate scene going forward may seem dull, but is characteristic of a market that hit a tipping point after the rocket ride of 2013, she said. Median home prices rose 27.5 percent. Investors swooped in, scooping up foreclosure stock. Inventory was crimped. Cash was king.

That dynamic has significantly impacted housing affordability in California and forced some buyers to delay their home purchase, association president Kevin Brown said. Any slow-down in price gains will help would-be buyers get into the market.

“I don’t think it’s out of the question that within two years from now we could see some declines or retreats in terms of prices,” Appleton-Young said.

Appleton-Young said it may look ho-hum to some, but it will be a good pause for people who have gotten exhausted by multiple offers and competition in the past couple of years.

The percentage of properties fetching multiple offers has dropped to 53 percent from 70 percent in 2013, she said.

“We believe the change will be driven by the increase in inventory we are already experiencing, as well as improvement in the macro-economy and job creation,” Appleton-Young said.

The association predicts 3 percent growth in 2015 in the nation’s gross domestic product, up from 2.2 in 2014. “With the U.S. economy expected to grow more robustly than it has in the past five years, and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015.”
Source: http://www.pe.com/articles/percent-751496-appleton-home.html

 

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