C.A.R.'s California Housing Market 

Forecast for 2003:

 Continued gains in median price, more moderate sales pace on the horizon

LONG BEACH, Calif. (Oct. 10) - The median price of a single-family home in California will hit a new record in 2003 while sales will decrease slightly compared to this year's torrid pace, according to the California Association of REALTORS® "2003 Housing Market Forecast" released today.

The median home price in California will increase 10.0 percent to $344,300 in 2003 compared to $313,000 this year, while sales for 2003 are projected to reach 530,900 units, falling 3.0 percent compared to 2002. Price appreciation will be fueled in part by the continuing shortage of housing across much of the state. California typically adds 220,000 to 250,000 new households each year, yet only builds about 150,000 new housing units annually, according to the report. "The California housing market has been characterized by unprecedented sales activity and impressive price appreciation in 2002, and will remain strong into 2003 as it benefits from a recovering economy." said C.A.R. President Robert Bailey. "The pace of home sales should return to more sustainable levels in 2003, while the overall health of the residential real estate market will depend on regional job growth and continued favorable interest rates in the coming months."  

Home sales for California in 2002 are expected to reach 547,300 units, largely as a result of the unusually high level of sales earlier this year, and should eclipse the prior sales record of 537,830 set in 1999, according to C.A.R. economists. Sales activity in 2002 has been spurred by the lowest mortgage rates in decades, despite the sluggish economy. Housing market activity in the Central Valley and Southern California regions remained strong this year, while the San Francisco Bay Area housing market overall has rebounded strongly from a weak market in 2001. "California weathered the economic slowdown better than the nation over the past 18 months, and is expected to show faster job growth than the nation as a whole in 2003," said Leslie Appleton-Young, C.A.R.'s vice president and chief economist. "The performance of the San Francisco Bay Area economy will be tied to the expected rebound in the technology sector. Southern California and the Central Valley, both of which weathered the economic slowdown with minimal job losses, should show solid gains in economic activity in 2003."

Appleton-Young's complete forecast will be broadcast live over the Internet today on the Association's Web site, C.A.R. Online, at http://www.car.org/webcast during C.A.R.'s California REALTORÒ EXPO 2002 in Long Beach, Calif.

The California Association of REALTORS® (http://www.car.org) is one of the largest state trade organizations in the United States, with more than 105,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles. 

2003 FORECAST FACT SHEET

2001 2002 2003

CALIFORNIA ECONOMY

Unemployment rate 5.3%  6.4%  6.3%

Nonfarm Jobs Change 1.4%  -0.2%  1.8%

Population Change 1.7%  1.5%  1.5%

Real personal income change* -1.3%  -1.4%  1.7%

Single-family residential permits 106,700  110,000  111,000

Multi-family residential permits 41,600  40,500  42,000

Single-Family Resales 504,430  547,300  530,900

% Change -5.8  8.5  -3.0

Single Family Median Price $265,480  $313,000  $344,300

% Change 10.0%  18.0%  10.0%

* UCLA Economic Forecast