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This week, Leslie Appleton-Young, Vice President and Chief Economist for the California Association of Realtors was to speak at a Sacramento Realtor Association meeting, however she had a family emergency so Robert Kienhenz, PHD and Deputy Chief Economist spoke about the current California Real Estate Market as well as touching on the National Real Estate Market and the 2007 Forecast for Real Estate as indicated by the chart above.
Note: It was announced that the wholesale market is the lowest since 1993 and with it going down today we will see the results in 6-18 months.
As we all know there has been greater volatility in California than any other state however “we are not in the
tank.” As you can see to the right, the chart indicates the Real Estate Boom with the appropriate figures. But even with the decline in sales, now… it is still no where near the 1989 National decline since all of the other key factors are in place such as the economy, job market, and interest rates. It was suggested, however that there are forecasts of a possible recession in 2008 or 2009 or 2010. The experts are not pinning it down specifically. Now, of course we all know what can happen when the media picks up on that one and runs with it. But, this was discussed briefly this week and I thought I’d make your day!
To the left is the Economic Forecast for 2007 as compared to 2002 thru 2006.
Some of the reasons given for the slow down in the real estate market lately is in the first quarter there was a gap between the sellers and buyers expectations. Sellers were still holding out to last year’s prices and buyer’s were looking for some deals. And now we are seeing the sellers become more familiar with the real estate market and buyers beginning to realize that their time is now.
Below is a chart of the Median Income level and what a typical buyer can afford depending on their income. And with many First Time Homebuyers who have little or no down this is quite significant. 
Some aspects that effected home sales 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.
