| Employment Trends and ForecastsThe main | | | | housing values during 2008 were devastating, with |
| long-term foundational driver in terms of housing | | | | less severe drops estimated in 2009 (mostly |
| sales volume and price support is a given region's | | | | having occurred in the 1st half) with stabilization |
| employment base. The following trends and a | | | | projected during the 2nd half of the year. By |
| five year forecast of employment and | | | | 2010, demand pressures will likely cause prices to |
| unemployment levels for Northern California. | | | | conservatively increase by 1.7%. |
| This region is forecast to lose 344,008 non-farm | | | | Median home prices have fallen 42% from their |
| jobs during 2009 – a 4.1% loss of the total | | | | peak in 2006, to a level similar to the median price |
| non-farm job base, for the biggest loss in | | | | in 2002-03. Following a bottoming out in 2009, |
| decades. During Year 2010, an additional loss of | | | | mild price appreciation patterns beginning in 2010 |
| 69,433 jobs is forecast. Thereafter, the impact | | | | are likely to be relatively gradual during the next |
| from the national stimulus package will increasingly | | | | few years, but will build momentum as the |
| be felt, and combined with improved financial | | | | economy begins to improve, distressed inventory |
| markets, should lead the national economic | | | | is absorbed, and economic expansion returns. |
| recovery towards regional economic expansion. | | | | By 2014, the median home price is forecast to |
| By 2014, a healthy 2.1% growth rate is forecast | | | | increase a healthy annualized 8%. Despite this |
| for non-farm jobs in this region. | | | | increase by 2014, the resultant forecast median |
| After reaching historic levels estimated at 12.1% | | | | price will remain well below the peak |
| unemployment in 2009, it is forecast to peak at | | | | unsupportable level achieved in 2006. |
| 12.4% in 2010, before gradually receding toward | | | | Mortgage Rate Trends and ForecastYears 2009 |
| more normal levels thereafter. State budget | | | | and 2010 will be the lowest years in terms of |
| woes have intensified high unemployment levels. | | | | mortgage rates in over two decades. The super |
| Housing Construction Trends and ForecastsLevels | | | | low home loan rates have been made possible by |
| of housing construction in the Northern California | | | | the Federal Reserve's extraordinary efforts to |
| closely correlate with residential permit activity. | | | | prop up the housing market and the overall |
| Builders cut back sharply on construction after the | | | | economy in the wake of the global financial crisis. |
| housing bubble burst, causing the severe decline in | | | | A window of opportunity exists to refinance or |
| permit activity in 2008. Residential permit activity | | | | purchase a home at historically low rates, allowing |
| is anticipated to keep declining through 2009, | | | | for much more relatively affordable housing costs |
| dropping to historic lows in 2010 and remaining low | | | | for most buyers. By 2011 mortgage rates are |
| through 2011. | | | | likely to increase as economic growth increasingly |
| Permit activity is expected to be at extremely | | | | stimulates inflationary pressures, and as the world |
| depressed levels for the following two to three | | | | demands higher payments to service the nation's |
| years before gradually increasing to improved (but | | | | enormous debt load. |
| still low) levels by 2013. A decline in previously | | | | Household Income Trends and ForecastsIncreases |
| permitted housing units in the outlying areas | | | | in median household incomes are likely to be |
| magnified the plunge. | | | | marginal during Years 2009 and 2010 – a |
| Gradual incremental growth in the housing stock is | | | | reflection of the current economic downturn. |
| projected due to limited development | | | | Thereafter, income growth is likely to begin to |
| opportunities in key areas, oversupply in outlying | | | | normalize, reaching an annualized 2.8% gain by |
| areas, and the recessionary impact on funding and | | | | Year 2014. |
| feasibility for development. Incremental increases | | | | The number of households making between |
| in housing stock will be far lower than historical | | | | $100,000 and $200,000, and above $250,000, per |
| patterns. | | | | year is likely to increase dramatically during the |
| For a full report click here | | | | next five years as the population matures and as |
| Housing Price Trends and ForecastsDeclines in | | | | economic growth resumes. |