California home prices, sales up in 2021, realtor forecasts – Silicon Valley

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Home sales in California will rebound slightly next year after the pandemic, and home prices will continue to climb, thanks to lowest mortgage rates and strong homeownership demand, according to the 2021 housing forecast. state real estate agents.

But continued economic uncertainty and a shortage of homes for sale will keep price and sales gains under control in 2021.

Even with rising jobs and rebounding gross domestic product, the overall economy will not regain full strength by 2021, according to forecasts.

“Uncertainty about the pandemic, sluggish economic growth, increased foreclosures and stock market volatility are all unknown factors that could control prices and prevent the statewide median price from rising too much. rapidly over the coming year, “said California Association of Realtors’ chief economist Leslie Appleton-Young.

Sales of existing single-family homes are expected to increase to 392,500 deals in the state next year, up 3.3% from the expected total of 380,100 this year.

If the 2020 projection is correct, this year’s sales will have declined for the third year in a row, falling 4.5%.

Sales forecast for next year are still believed to be down 3.3% from 2019 levels.

Existing homes account for about two-thirds of all home sales.

Meanwhile, prices are expected to continue to rise next year. The median price of an existing home is expected to reach $ 648,800, up 1.3% from the projected median of $ 640,300 in 2020.

This year’s price is expected to rise 8.1% from 2019, in part due to strong sales of more expensive homes, which skews the median upward, Appleton-Young said.

Prices have risen steadily since 2012, when the median for the entire year was $ 319,300.

U.S. GDP will grow 4.2% in 2021 after an expected 5% decline this year, according to forecasts. Employment is not expected to return to pre-pandemic levels, with non-farm jobs increasing only 0.5% in 2021. This would follow an expected loss of 12.7% this year.

The unemployment rate in 2021 is expected to drop to 9% next year, from a projected rate of 10.8% in 2020.

Funding should also stay close to all-time lows. The 2021 mortgage rate for 30-year fixed-rate loans will average 3.1% in 2021, according to the forecast, compared to a projected annual average of 3.2% this year.

The 30-year mortgage was on average 2.87% last week and has been below 3% for the past 2.5 months, according to Freddie Mac.

“An extremely supportive lending environment and strong interest in home ownership will continue to motivate financially eligible buyers to enter the market,” said 2020 CAR President Jeanne Radsick of Bakersfield. “While the economy is expected to improve and interest rates will remain near their historic lows, housing supply constraints will continue to be a problem next year and could cap sales growth in 2021. “


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