Follow Me On Pinterest
During the California Association of Realtor meeting held in Sacramento for the Sacramento Realtor Association membership, last week; National as well as State-wide predictions were discussed. The main focus was as we all know this is merely a stablization period and 2007 will have modest decreases in sales but nothing as compared to what we have seen in 2006.
To the left is a chart of the California Housing Market for September 2006 with indicators for the quantity of homes for sale in the State, while showing the difference during the same time period a year ago along with the difference in percentage amounts.
The next line indicates the Sold dollar amount with the same characteristics as above. The other lines show homes that did not sell, the days on the market, the affordability for First Time Homebuyers and the 30 year fixed mortgage rate for the State of California.
2007 FORECAST FACT SHEET
| 2002 | 2003 | 2004 | 2005 | 2006f | 2007f |
| SFH Resales (thousands) | 572.6 | 601.8 | 624.7 | 625.0 | 481.2 | 447.5 |
| % Change | 13.6% | 5.1% | 3.8% | 0.04% | -23.0% | -7.0% |
| Median Price ($ thousands) | $316.1 | $372.7 | $450.8 | $524.0 | $561.0 | $550.0 |
| % Change | 20.5% | 17.9% | 20.9% | 16.2% | 7.0% | -2.0% |
| 30-Yr FRM | 6.5% | 5.8% | 5.8% | 5.9% | 6.5% | 6.7% |
| 1-Yr ARM | 4.6% | 3.8% | 3.9% | 4.5% | 5.6% | 5.6% |
T he Purple is a chart of the New Home Sales for the Central Valley in California. 
As stated before there are some key factors that effected home sales which are proven by the results after the Gulf Coast Disaster which brought about a lack of consumer confidence, rising energy costs also play a significant role and Federal Reserve interest rate hikes as well as New Home Builders and Investors. New Home Builders have a real impact on the market where there is a tremendous amount of new home building, those areas have fallen more significantly in sales and price than the state norm. The purple box indicates the percentage of New Homebuilders in the Central Valley area of California. New Home builders are down -36.5% in Sacramento and for the State as a whole New Home Builders are down -24%.
The 2006 California State norm for median price home is $561,000 and it is projected that figure will go down 2% in 2007 to an amount of $550,000 for California. The Nationally median price for a home in 2006 is $200,000. California has an inventory of 7 months of homes. The projection is that there will be a slower price appreciation but we will indeed appreciate. Just not boom!
An interesting statistic shared was that 7 of 10 homebuyers are 
repeat homebuyers that have equity. Since the investors moved on, the sales for investment are down -15%. Another interesting factor that was brought up was the Foreclosure rate and since it was at 1% and is now 2% that is a 100% gain. So, it’s all in how you look at it. When you hear that it is up 100% you get a little worried but the percentage of Foreclosures was not that great to begin with.
