October 15, 2020
Low mortgage interest rates and pent-up demand for homeownership will bolster California home sales in 2021. But the California Association of Realtors’ (C.A.R.) “2021 California Housing Market Forecast” notes economic uncertainty caused by the coronavirus pandemic and continued supply shortages will limit sales growth.
The baseline scenario of C.A.R.’s forecast envisions a modest increase in existing single-family home sales of 3.3% next year to reach 392,510 units, up from the projected 2020 sales figure of 380,060. The 2020 figure is 4.5% lower compared with the pace of 397,960 homes sold in 2019.
The California median home price is forecast to edge up 1.3% to $648,760 in 2021. This year, that number is projected to increase 8.1% to $640,330, up from $592,450 in 2019.
C.A.R. SVP and Chief Economist Leslie Appleton-Young says, “While home prices rose sharply in 2020, driven by strong sales of higher-priced properties and a limited inventory of homes for sale, the pace of price growth will be more moderate in the coming year. The uncertainty about the pandemic, sluggish economic growth, a rise in foreclosures, and the volatility of the stock market are all unknown factors that could keep prices in check and prevent the statewide median price from rising too fast in the upcoming year.”
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