July 9, 2004
Housing forecast: More record sales,
moderate price increases
New home sales in the Sacramento Region, as well as the prices of new and existing homes, will continue to hit record levels this year and next, according to the CSUS Forecast: Housing Sector Outlook from the California Institute for County Government at California State University, Sacramento.
Sales of existing homes, meanwhile, are expected to decline somewhat next year but remain strong.
Researchers say an improving job outlook for the region and the state will help maintain the strong pace of home sales. They say prices will rise only moderately due to an increasing supply of new homes and rising interest rates.
The forecast says rising home sales and home prices in the region, even during the recent national recession, have been driven by a relatively strong local job market, low mortgage rates and an influx of new buyers from the Bay Area.
By the end of 2004, the forecast predicts, the median price of a new home in the region will reach $335,000 and by the end of 2005 will be about $350,000. The new home median price passed the $300,000 mark just last summer.
The forecast predicts the median price of an existing home, which surpassed $200,000 last summer, will be more than $225,000 by the end of this year and $235,000 by the end of 2005.
Sales of new and existing homes will be higher this year than last, the forecast predicts, with new home sales reaching 17,700 this year and existing home sales reaching 41,000. In 2005, new home sales will reach 19,500 and existing home sales will fall a bit to 40,000, the forecast predicts.
The CSUS Forecast: Housing Sector Outlook is produced twice a year. It is based on an econometric model of the six-county Capital Region which incorporates data from more than two dozen separate economic variables.
More information is available from Matthew Newman, director of the California Institute for County Government, at (916) 324-0796, or at the institute’s website at www.cicg.org. Additional media assistance is available by contacting CSUS public affairs at (916) 278-6156.
California State University, Sacramento Public Affairs
6000 J Street Sacramento, CA 95819-6026 (916) 278-6156 firstname.lastname@example.org