As reported in today’s San Diego Union Tribune, the CA Assoc. of Realtors predicted that there will be a slight dip in the number of home sales next year (about 2% reduction) and a slight increase in prices (up 3.3%), compared with this year. These changes are attributable to the continued high rate of unemployment.
The market will likely have two distinct segments: a continuation of this year’s large volume of low-cost homes sold in foreclosure or in short sales, with multiple offers from first-time buyers and investors looking for bargains, and a slow moving segment of higher cost homes put onto the market as unemployment creeps into higher income groups. This latter group of homes will need to lower prices more in order to sell more quickly.
Also, some of the increase in sales this year is attributable to the $8000 federal tax incentive which is scheduled to expire at the end of this month. There is talk that Congress may extend this incentive.
In conclusion, this may be a very good time to buy for suitable households, before prices begin to creep up.