The housing market this year has been hit with significant price erosion, record defaults and a prolonged credit crunch that recently has grown more grisly.
The question is has the worst passed?
A real estate trade association tackled that issue today by predicting that 2009 will be rough, but less brutal than this year.
Assuming the financial system stabilizes within the next several months, California home sales are expected to gain momentum in 2009, while values will bottom out, according to the California Association of Realtors.
Though the future looks brighter than the present, CAR Chief Economist Robert Kleinhenz warns: "We're not out of the woods yet.
"Things change on a dime these days. It makes it very difficult to make any kind of assertion with a high degree of certainty. We're in uncharted territory."
California's median price for existing homes is expected to decline 6 percent to $358,000 next year, compared with the projected median of $381,000 this year, CAR reported at a real estate expo that runs today and tomorrow at the Long Beach Convention Center.
For 2008, the statewide median price is expected to fall 31.7 percent, from $558,100 to $381,000.
Sales for 2009 are projected to increase 12.5 percent to 445,000 units, compared with the forecasted 395,600 units in 2008, according to CAR. Sales of distressed properties are expected to peak in early 2009, a critical factor in the housing market that directly affects the time frame for stabilization in the median price, said CAR President William Brown.
And it's probable that Ventura County, which has weathered the price deterioration better than many other regions, will bottom out sooner — possibly months rather than quarters — than the state as a whole, said Kleinhenz.
But as home sales improve across the state, Ventura County might see relatively moderate improvement. Sales have swelled the most in the Inland Empire and Sacramento, areas hit hard by foreclosures and sharp price declines.
Doug Michie, an adjunct professor at California Lutheran University in Thousand Oaks, provided a less optimistic view. He thinks the economy is in a recession that will last at least until the third quarter of 2009. Michie forecasts Ventura County's median, which was $478,410 in August, to fall to $450,000 by the end of the year. He projected another 17 percent drop in the median by this time next year. The median is the midpoint, where half the homes sell for more and half for less.
"I wouldn't rush out and buy a house," Michie said. "Even if prices start to stabilize, they're not coming up for years."
