California's battered housing market will see even darker days next year as home prices drop 6 percent, even as the sales volume rises, a forecast released Wednesday says.
In 2009, the median existing home price in California will drop to $358,000, from a projected $381,000 this year, according to the report by the Los Angeles-based California Association of Realtors.
However, next year's drop will be much milder than this year's expected 31.7 percent slump in the median home price.
The median price is the middle figure where half of homes sold for more and half for less.
However, sales for 2009 are projected to increase 12.5 percent to 445,000 units, compared with 395,600 units projected for this year, the forecast says. Home sales this year will be ahead of 2007 sales by 12 percent.
"The current uncertainty about the financial system and economy is likely to persist over the next several weeks, and could extend into next year," CAR president William E. Brown said in a release. "Our forecast assumes that the financial system will begin to show signs of stabilization late in 2008 and into early 2009."
Brown further said he expects the economy to be "at its weakest period over the next three quarters through the second quarter of 2009, with recessionary economic conditions throughout that time period, before we begin to see a turnaround in the second half of next year."
Sales of distressed California properties, such as foreclosed homes, are expected to peak in early 2009, Brown said.
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