LOS ANGELES, Oct. 12, 2017 /PRNewswire-USNewswire/ — With the economy expected to continue growing, housing demand should remain strong and incrementally boost California’s housing market in 2018, though a shortage of available homes for sale and affordability constraints will be a challenge, according to the “2018 California Housing Market Forecast,” released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

CALIFORNIA ASSOCIATION OF REALTORS (PRNewsFoto/C.A.R.)

The C.A.R. forecast sees a modest gain in existing single-family home sales of 1.0 percent next year to reach 426,200 units, up slightly from the projected 2017 sales figure of 421,900. The 2017 figure is 1.3 percent higher compared with the 416,700 pace of homes sold in 2016.

“Solid job growth and favorable interest rates will drive a strong demand for housing next year,” said C.A.R. President Geoff McIntosh. “However, a persistent shortage of homes for sale and increasing home prices will dictate the market as housing affordability diminishes for buyers struggling to get into the market.”

C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 2.3 percent in 2018, after a projected gain of 2.1 percent in 2017. With California’s nonfarm job growth at 1.2 percent, down from a projected 1.6 percent in 2017, the state’s unemployment rate will dip to 4.6 percent in 2018 compared with 4.8 percent in 2017 and 5.5 percent in 2016.

The average for 30-year, fixed mortgage interest rates will increase slightly to 4.3 percent in 2018, up from 4.0 percent in 2017 and 3.6 percent in 2016, but will still remain low by historical standards.

The California median home price is forecast to increase 4.2 percent to $561,000 in 2018, following a projected 7.2 percent increase in 2017 to $538,500.

“This year’s housing market can be told as a tale of two markets – the inventory constrained lower end and the upper end that’s non-inventory constrained,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “This trend is likely to continue into 2018 as active listings have declined across all price ranges for the past two years, but is most obvious at the lower end. 

“With tight inventory being the new ‘norm’ for the past few years and at least the upcoming year, we’ll continue to see fierce competition driving up prices, leading to lower affordability and weaker sales growth.”

2018 CALIFORNIA HOUSING FORECAST

2012

2013

2014

2015

2016

2017p

2018f

SFH Resales (000s)

439.8

414.9

382.7

409.4

416.7

421.9

426.2

% Change

4.1%

-5.9%

-7.8%

7.0%

1.8%

1.3%

1.0%

Median Price ($000s)

$319.3

$407.2

$446.9

$476.3

$502.3

$538.5

$561.0

% Change

11.6%

27.5%

9.8%

6.6%

5.4%

7.2%

4.2%

Housing Affordability Index

51%

36%

30%

31%

31%

29%

26%

30-Yr FRM

3.7%

4.0%

4.2%

3.9%

3.6%

4.0%

4.3%

p = projected

f = forecast

Appleton-Young will present an expanded forecast at a luncheon Thursday afternoon during CALIFORNIA REALTOR® EXPO 2017, running Oct. 10-12 at the San Diego Convention Center in San Diego, Calif.  The trade show attracts nearly 6,000 attendees and is the largest state real estate trade show in the nation. The remaining highlights of CALIFORNIA REALTOR® EXPO 2017 include:

Thursday, Oct. 12

10:45 a.m.11:30 a.m.
Teamwork Makes the Dream Work – Top Teams Panel
Real estate teams are increasingly popular in California.  What are the top secrets behind top teams? How do the top teams make it work? What are the biggest challenges and benefits of having a team? How do they create consistency, culture, and motivation? How do teams impact the client experience? Hear the answers from top producing teams as they dish out key advice and takeaways attendees can apply to build their teams and make them thrive.

10:45 a.m.11:30 a.m.
Communication Across Cultures
REALTORS® will learn how to handle cultural differences in a transaction, how each culture communicates, and understand different customs, which can mean the difference between landing or losing a listing.

12 noon – 1:30 p.m.
Thursday Lunch: “2018 Housing Market Forecast with Leslie Appleton-Young
C.A.R. Chief Economist Leslie Appleton-Young will share valuable information and insight about next year’s California housing market, including projected home sales, median prices, housing affordability, inventory supply, and mortgage rates and availability. (Ticketed event)

2 p.m.2:45 p.m.
Has it Happened to You? Don’t Be a Victim of Cybercrime
As part of a REALTOR®’s professional duties, their clients trust them with safekeeping important information and documents. Mobile tools and online platforms are being used often in business and in transactions, increasing the risk of cybercrime for REALTORS® and their clients. Data hacking, identity theft and fraud are more prevalent than ever. Learn how to be proactive and protect against cybercrime. Learn what tools and programs will keep files secure and how to respond in the event of a hack, virus, or identity theft.

Journalists who would like to attend CALIFORNIA REALTOR® EXPO 2017, please email lotusl@car.org or call (213) 739-8304.  For more information on CALIFORNIA REALTOR® EXPO 2017, visit expo.car.org.

Leading the way …® in real estate news and information for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

 

View original content with multimedia:http://www.prnewswire.com/news-releases/car-releases-its-2018-california-housing-market-forecast-300535699.html

SOURCE CALIFORNIA ASSOCIATION OF REALTORS