(Updates with economist’s comment in fifth paragraph.)
Sept. 20 (Bloomberg) -- Home sales in California, the most populous U.S. state, are likely to rise 1 percent in 2012 after being “essentially flat” this year, the California Association of Realtors forecast today.
Sales of existing homes are expected to rise to 496,200 units from a projected 491,100 in 2011 and 491,500 last year, the Los Angeles-based group said in a statement. Median prices probably will rise 1.7 percent to $296,000 from $291,000 this year, according to the Realtors.
“The fundamentals of the housing market -- such as low mortgage rates, high housing affordability and favorable home prices -- are expected to continue,” Beth L. Peerce, president of the California association, said in the statement. “But at this point, a strong housing recovery will depend on consumer confidence, job creation and the availability and cost of home loans.”
California home sales, which account for about a 10th of the U.S. total, have fallen from 625,000 in 2005, while median prices are down from a peak of $560,300 in 2007, according to the group. The state ranks second nationally, after Nevada, in the pace of foreclosure filings. One of every 226 homes received a notice of default or was subject to a foreclosure sale in August, RealtyTrac Inc. reported Sept. 15.
It will take as long as five years for the state’s inventory of foreclosed properties to be absorbed, Leslie Appleton-Young, chief economist for the California Association of Realtors, said in a conference call today.
‘Closer to Five’
“It depends on the area,” Appleton-Young said. It will be “closer to five in the inland areas, where I don’t think we’ve seen a lot of the supply that’s going to come through come through,” she said.
California’s unemployment rate was 12.1 percent in August, also second to Nevada and above a U.S. rate of 9.1 percent, the state Employment Development Department reported Sept. 16.
The California Realtors’ forecast for this year was lowered from 505,000 sales projected in June and 502,000 in October.
--Editors: Daniel Taub, Kara Wetzel
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