A pent up demand for homes will continue to help the California housing market recover next year even as government leaders remain at odds about the federal budget.
Home sales are expected to increase 3.2% statewide next year to about 444,000 units, according to the 2014 housing forecast from the California Association of Realtors. That’s a modest increase from the projected 2013 sales figure of 430,000 homes.
The median home price is forecast to increase 6% to $432,800 in 2014 following a projected 28% increase this year to $408,600. Fresno County’s median home price in August was $184,000.
“As the market continues to improve, more previously underwater homeowners will look toward selling, making housing inventory less scarce in 2014,” said Leslie Appleton-Young, the association’s vice president and chief economist.
Some things to keep an eye on include federal, fiscal, monetary and housing policies which could send mortgage interest rates up, Appleton-Young said.
While the government shutdown could affect home sales this quarter, it should not change the forecast for next year.
“We feel somewhat cushioned,” Appleton-Young said. “If a huge exogenous event occurs all bets are off.”