According the 2009 California Housing Market Forecast from the California Association of Realtors, prices will continue to decline into early 2009 while the number of sales will continue to increase. Of course, we usually have a holiday/winter slowdown.
What does this mean?
On the one hand, prices continue to adjust downward. Most economists foresee the decline to level soon-ish. How's that for vague?
On the other hand, more homes are selling than was projected.
This signals the beginnings of the turnaround. Buyers, in particular first time buyers, are getting back into the market. Many would-be home buyers are realizing that this is a rare opportunity for them and they don't want to miss it. Rates are low and prices are down. No one knows how long it will last.
As housing inventory lessens due to increased buyer activity, the market will be able to rebound. It is all about supply and demand, right?
Keep in mind that the following is for all of California. As one of the world's biggest economies (8th, right?), our real estate market is huge and varies greatly from place to place.
My advice to folks considering buying or selling San Francisco real estate in today's market:
To the first time buyer: BUY (This is a "once in 10 to 15 years" kind of opportunity. TICs, Condos, Lofts and some single family homes are ON SALE. Rates are great and loan options abound for those with low or high down payment.) Read more here. FHA loan info here.
To the home owner of 1-3 years: HOLD (Stay put and enjoy your home. It will be a great investment in time. Don't worry! You own your home in one of the World's most coveted Cities! You are not a renter! You save money in taxes!)
To the homeowner of 3-5 years: HOLD or TRADE-UP (Ask us to help you determine what your current home is worth AND what your next dream home costs with today's discounts. Depending on the answer, it might be more profitable to move-up. Plus you get the house of your dreams. Benefits of Trading Up in a Down Market HERE.)
To the homeowner of 5+years: TRADE-UP or DOWNSIZE (Long-term gains in San Francisco real estate remain substantial. Take advantage of the discount in the home your really want, whether it's a easy-living South Beach condo or a trophy house on Liberty Hill.)
From CAR:
C.A.R. FORECAST CALLS FOR PRICES TO LEVEL OUT AND SALES TO RISE IN 2009
Home prices throughout most areas of California will post declines next year, while sales of existing homes will continue to rise in 2009, according to C.A.R.'s "2009 California Housing Market Forecast," released today during CALIFORNIA REALTOR® EXPO 2008 (www.realtorexpo.org), running through Thursday, Oct. 16 at the Long Beach Convention Center in Long Beach.
"The current uncertainty about the financial system and economy is likely to persist over the next several weeks, and could extend into next year," said C.A.R. President William E. Brown. "Our forecast assumes that the financial system will begin to show signs of stabilization late in 2008 and into early 2009."
The median home price in California will decline 6 percent to $358,000 in 2009 compared with a projected median of $381,000 this year, according to the forecast. Sales for 2009 are projected to increase 12.5 percent to 445,000 units, compared with 395,600 units (projected) in 2008.
"Sales in 2008 will be ahead of last year by 12 percent, with a further increase of 12.5 percent expected in 2009," said C.A.R. Chief Economist Leslie Appleton-Young. "However, the next couple of quarters in late 2008 and early 2009 will be marked by seasonal decreases in activity, with a pickup expected by the second quarter of next year."
