Industry experts and the media have made it hard to get away from the state of the real estate market throughout the United States, ranting on about sharply declining home value averages and the bursting of the housing bubble. Many of these gloom and doom predictions generalizes the information for nationwide usage, when really, each geographical area has it's own unique rises and falls in home value and home sales and real estate trends in general. If you're looking to buy or sell a home, the national home value average won't help you (if you're curious, it's actually about $221,900) but digging deeper into your area's real estate market certainly will. Before deciding to sell your home, or move to a new area, it is important to get an idea not just of the average home value and rate of sale, but the economy, employment, and attractions in that area.
California (with it's capital of Sacramento) has a population of 36,457,549 with an unemployment rate of about 5.1%, inching closer to their historic low of 4.7% in November of 2006. The median household income in 2004 was $49,894 while the current median home value is about $575,000. The economy is based on agriculture (mainly vegetables, fruits & nuts, dairy, cattle and grapes) and industry sectors such as electronic components, computer and software, film production, aerospace, petroleum and tourism.
California is well known for it's attraction of tourists. In fact, California is first in the nation for travel earnings, domestic and overseas visitors, with tourism equaling out to 6.5% of the gross state product. There are 12 specific regions of California, all with their own attractions to offer: the North Coast, Shasta Cascade, the Bay Area, Gold Country, Central Valley, High Sierra, Central Coast, Los Angeles, Desert, Orange County, Inland Empire and San Diego. The myriad tourist attractions California has to offer are amusement/recreational parks (Disney Land, Yosemite National Park, etc), beaches, mountains, desert, wine country, museums, and of course cultural hot spots like the cities of San Francisco, Los Angeles, Sacramento and Santa Barbara.
With such a high level of tourism, it's no surprise that in the early years of the 2000s, California's real estate market was booming and home value averages were at an all time high. People were moving to California or trying to purchase second homes like crazy and inventory sold like hotcakes. As the California Association of Realtors predicted, the market has downshifted since 2006. They predict the median home value will decline about 2% to $550,000 while home sales will decrease by about 7% to under 450,000 units, compared with over 480,000 units in 2006.
C. A. R. President Vince Malta believes the gap between buyer and seller expectations has slowed the market because sellers still hoped to obtain the highest home value price possible in 2006 while buyers’ sense of urgency wanned as they had more choices on the market. Vice President and Chief Economist Leslie Appleton-Young of C. A. R. has another explanation as well: “The anticipated slowdown that began in October 2005 was heightened by dual natural disasters in the Gulf Coast, a significant drop in consumer confidence, rising energy and raw materials costs and a series of Federal Reserve interest rate hikes that began in June 2004. ” She goes on to say that mortgage rates passed a threshold as well, causing a decline in affordability of homes.
The California Association of Realtors also expects that some regions such as Central Valley, San Diego and the Riverside/San Bernardino regions will have greater sales declines and home value drops than the rest of the state. So what does this mean to a consumer looking to sell? Well, right now your home value has probably lowered some what (especially when compared with inflation) so if you can hold off on selling, you may want to see what happens in a year or two. If you're looking to buy a home and stay in it long term, now might be the time to get a great home at a low home value and hold on to it. Ten years from now, there's no telling how the California real estate market will go or what your home value will be – but for right now, California is moderate at best.
Find out your own home value and other valuable homeowner information at GetMyHomesValue.com
Ashley Lichty is a webmaster and the resident SEO of Web Xtreme, Inc. She has a background in real estate and marketing with an emphasis in writing.