Below is an article from C.A.R. Market Matters about when they think the market will be considered “corrected”. My prediction is it will be by mid 2014. This is when banks have sold the vast majority of their foreclosed inventory and many of the short sales will be a thing of the past. Granted there will still be a continuous new supply of both due to how many homes are still underwater and the higher than normal default rates on many recent loans. But I truly believe we will clearly see the light at the end of the tunnel by summer of 2014.
There is one big caveat to this, that the economy continues to stay the way it is or improves a little. If for any reason it turns negative, then all bets are off and 2017 may be a very realistic prediction. Prognosticating can be fun if one is right and given this three year difference, I truly hope I am correct. Good luck to all those looking to sell or buy this coming year.
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When will the housing market be “corrected?”
The housing recovery in California is expected to continue through to 2013, but the market won’t be “corrected” until as far off as 2017, according to the California Housing Market Forecast released by the CALIFORNIA ASSOCIATION OF REALTORS.
- Homes sales and prices are expected to keep rising, but lower-than-normal inventory levels and underwater mortgages are key hindrances to a faster recovery, according to Leslie Appleton-Young, chief economist with the CALIFORNIA ASSOCIATION OF REALTORS®.
- Home sales are forecasted to rise 1.3 percent to 530,000 units next year, based on the projected tally of 523,300 units this year. That’s a slower growth than that of 2011 to 2012, which is roughly 5 percent.
- The momentum in prices also is expected to carry through to 2013, a result of pent-up demand for a limited housing supply. The median price could rise 5.7 percent to $335,000 in 2013. That’s lower than the projected price growth from 2011 to 2012, an estimated 11 percent. The state has a 3.2 months’ worth of housing inventory, significantly lower than the 16 months’-plus supply of saw roughly four years ago.
- “Pent-up demand from first-time buyers will compete with investors and all-cash offers on lower-priced properties, while multiple offers and aggressive bidding will continue to be the norm in mid- to upper-price range homes,” said Appleton-Young in the report.
- Appleton-Young says what underwater borrowers throughout the state will do — be it selling or holding — will have a big effect on next year’s housing recovery.
- Other things to watch next year that will have a bearing on the housing market include: policies related to the state,local and federal governments; and housing and monetary policies, Appleton-Young said.