Realtors ’07 Forecast Looks Promising for Future Foreclosure Activity

LONG BEACH, Calif. — If California’s economic indicators stay at their present course, 2007 should be a very good year for investing and purchasing foreclosure properties at bargain prices. At Wednesday’s Opening Session of California Realtor EXPO 2006, Leslie Appleton-Young, Chief Economist for the California Association of Realtors, presented her housing forecast for next year, calling for the state’s median home price to drop for the first time in 10 years and the pace of home sales to continue to decrease.

The CAR forecast also calls for a 2 percent drop in the state’s median home price next year from a projected median price of $561,000 for 2006, down to a projected median of $550,000 in 2007 — a stark contrast to a year ago when most forecasters were predicting a soft landing and few were expecting prices to fall and sales to plunge.

Moreover, sales of California homes are expected to sink 23 percent this year compared to 2005 and fall another 7 percent next year.  The Realtor group expects 447,500 homes to sell in 2007, compared with 481,200 homes in 2006. Some regions of the state — including the Central Valley, San Diego and Riverside/San Bernardino — will experience sales declines greater than the state as a whole in 2007.

The expectations of the California Realtors is less bleak than a new housing report,  "Housing at the Tipping Point," released this month by Moody’s Economy.com that predicts sharp declines, some nearing 20 percent in many metropolitan areas of California, Arizona, Nevada, Florida, Washington, D.C. and Detroit. 

The Realtor group also forecast a spike in foreclosures activity next year. These new forecasts, along with monthly research complied by RealtyTrac, shows a slumping housing market in California and other states that could lead to increased foreclosure activity next year. Feel free to comment on the blog, or send us an e-mail to editor@foreclosurepulse.com.  We welcome your comments and feedback.