2006 California Real Estate Forecast
The newest issue of Fortune there is a real estate forecast for 100 of the largest metro real estate markets summarized on CNN Money. So area's are forecasted to continue the run-up in prices but these are typically in the Midwest with Texas appearing to be the next hot spot (investors read: San Antonio). Our focus is California real estate, so here is some of the figures from the report:
The first column is ranking, so you can see most of the California areas made up the bottom 10%, which may be in fact supported by recent decrease in the Pending Homes Sales index.
Whats important is to look at the last two numbers. These are the forecasted growth rates for 2006 & 2007.
94 Sacramento-Arden-Arcade-Roseville CA $372,900 -1.20% -5.10%
99 San Diego-Carlsbad-San Marcos CA $598,700 -3.40% -5.70%
92 Bakersfield CA $286,300 -0.80% -3.00%
97 Riverside-San Bernardino-Ontario CA $362,800 -2.60% -6.80%
87 Stockton CA $423,100 -0.30% -5.90%
83 San Francisco-San Mateo-Redwood City CA $766,000 0.10% -2.90%
90 Oakland-Fremont-Hayward CA $651,300 -0.70% -4.40%
98 Santa Ana-Anaheim-Irvine CA $682,300 -3.10% -6.10%
91 Fresno CA $340,800 -0.80% -2.80%
89 Oxnard-Thousand Oaks-Ventura CA $480,300 -0.70% -5.00%
95 Los Angeles-Long Beach-Glendale CA $412,900 -1.60% -6.30%
88 San Jose-Sunnyvale-Santa Clara CA $720,900 -0.40% -3.90%
So again, in all of this data it's hard to make sense of what is really happening but what I always tell my clients is simple: "Buy a home, not an investment" If you keep this in mind than the occasional dips in prices don't matter because you purchased a "home" not an "investment". It's proven that over time "real estate" is prudent investment but like any other investment the price can go down.
The first column is ranking, so you can see most of the California areas made up the bottom 10%, which may be in fact supported by recent decrease in the Pending Homes Sales index.
Whats important is to look at the last two numbers. These are the forecasted growth rates for 2006 & 2007.
94 Sacramento-Arden-Arcade-Roseville CA $372,900 -1.20% -5.10%
99 San Diego-Carlsbad-San Marcos CA $598,700 -3.40% -5.70%
92 Bakersfield CA $286,300 -0.80% -3.00%
97 Riverside-San Bernardino-Ontario CA $362,800 -2.60% -6.80%
87 Stockton CA $423,100 -0.30% -5.90%
83 San Francisco-San Mateo-Redwood City CA $766,000 0.10% -2.90%
90 Oakland-Fremont-Hayward CA $651,300 -0.70% -4.40%
98 Santa Ana-Anaheim-Irvine CA $682,300 -3.10% -6.10%
91 Fresno CA $340,800 -0.80% -2.80%
89 Oxnard-Thousand Oaks-Ventura CA $480,300 -0.70% -5.00%
95 Los Angeles-Long Beach-Glendale CA $412,900 -1.60% -6.30%
88 San Jose-Sunnyvale-Santa Clara CA $720,900 -0.40% -3.90%
So again, in all of this data it's hard to make sense of what is really happening but what I always tell my clients is simple: "Buy a home, not an investment" If you keep this in mind than the occasional dips in prices don't matter because you purchased a "home" not an "investment". It's proven that over time "real estate" is prudent investment but like any other investment the price can go down.
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