Industry News

California real estate forecast calls for price decline in ’07

Realtor group expects 23% drop in sales this year

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The median home price in California is expected to drop 2 percent in 2007 compared to 2006, according to a forecast released this week by the California Association of Realtors trade group. The median price of a home in the state is forecast at $561,000 this year and $550,000 in 2007. That compares to an expected 7 percent increase this year compared to 2005, a 16.2 percent gain in 2005, and a 20.9 percent rise in 2004. Meanwhile, single-family existing-home sales are expected to drop 23 percent this year compared to 2005 and fall another 7 percent in 2007 compared to this year, according to the 2007 California Housing Market Forecast. Sales were up .04 percent in 2005 compared to 2004, up 3.8 percent in 2004, up 5.1 percent in 2003, and up 13.6 percent in 2002. The rate for a 30-year fixed-rate mortgage in the state is expected to be 6.5 percent this year and to rise to 6.7 percent next year, while the rate for a one-year adjustable-rate mortgage is expected to be 5.6 percent this ye...