The California Association of Realtors' (C.A.R.) 2016 California Housing Market Forecast, released yesterday, foresees 2016 to be "the best year for home sales activity since 2012." According to the report, California is expected to see over 430,000 home sales next year, exceeding 2015 sales by over 25,000 closings, an annual increase of 6.3%. Demand in less expensive areas (like the Central Valley and San Bernardino) is projected to stay strong thanks to solid job growth.
The forecast calls for a 3.2% increase in home prices next year, compared to 6.5% in 2015, 9.8% in 2014, 27.5% in 2013 and 11.6% in 2012.
Although home sales are expected to grow in the coming year, home affordability will continue to be an issue in the Golden State. Despite this cost affordability, 2016 is anticipated to be the best year for sales activity since 2012, which is great news for the California housing market.
Fixed rate 30-year mortgages are also expected to reach 4.5% in 2016.