In an article from CAR President James Liptak and Leslie Appleton Young, California will be dealing with a ‘new normal’ market and will likely will consist a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
“Housing in California has become a tale of two markets,” Liptak said. “The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed. While demand from first-time buyers for low-end properties will continue throughout next year, sales could be impacted if discretionary sellers do not return to the market by the second half of 2010.
“With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and a roughly four-month supply during the peak season,” said C.A.R. and Vice President Leslie Appleton-Young
“Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,” she said.
“The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government,” Appleton-Young said.
Much of what they discuss is actually already occurring in the Oakland marketplace. Homes, often bank owned, are garnering multiple offers with many investors offering all cash to purchase these homes. The mid level to higher end markets such as Crocker Highlands, Rockridge, Montclair and Piedmont have seen a slowing in the market place due in part to an uncertainty still in employment as well as the additional challenges surrounding lending for higher priced homes.
