Housing shortageMarket DirectionSales DataStatistics

2019 Market Predictions

The California Association of Realtors (C.A.R.) is predicting a slowdown in the 2019 housing market. Interest rates will continue to go up, straining already weak affordability and reducing demand. The senior Vice President and Chief Economist of C.A.R., Leslie Appleton-Young, says that high prices despite our recovery from the housing shortage are fueling a period of uncertainty among homebuyers. Buyers will feel the need to stand back while he market figures out where it’s going — which is probably down.

Another issue that will be facing California in 2019 is outmigration. Many people no longer able to afford homes where they have been living are forced to move elsewhere. This is often another county with lower priced and less desirable homes, and sometimes even outside of California with its relatively high-priced home market.

C.A.R. has provided data for the prior five years beginning in 2013, this year’s projected numbers, as well as forecast numbers for 2019:

Year:                                                                           2013       2014       2015       2016       2017       2018       2019
Single Family Home resales, thousands: 414.9      382.7     409.4      417.7      424.1      410.5      396.8
% change:                                                               -5.9%    -7.8%      7.0%       2.0%      1.5%      -3.2%      -3.3%
Median price, thousands:                               $407.2   $446.9   $476.3    $502.3   $538.0   $575.8    $593.4
% change:                                                              27.5%      9.8%       6.6%       5.4%      7.2%       7.0%       3.1%
Housing Affordability Index*:                         36%         30%        31%        31%        29%        28%         25%
30-year fixed rate:                                              4.0%        4.2%       3.9%       3.6%      4.0%       4.7%       5.2%

*The Housing Affordability Index is the percent of households who can afford a median-priced home.

More: https://www.car.org/aboutus/mediacenter/newsreleases/2018releases/2019housingforecast

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