California home prices expected to continue slide in 2009

Housing prices are expected to decline throughout much of California next year, but sales of existing homes will continue to rise, according to a report by the California Association of Realtors.

CAR's 2009 California Housing Market Forecast, to be released Thursday, predicts that California's median price will fall 6 percent next year to $358,000 compared with a projected median of $381,000 for this year.

Sales for 2009 are projected to increase 12.5 percent to 445,000 units, compared with 395,600 units (projected) in 2008.

Robert Kleinhenz, CAR's deputy chief economist, said those projections weren't exactly unexpected.

"Having observed the way the housing cycle has behaved in the past, in both the 80s and 90s, this is not surprising," he said. "The nice thing is that we've already turned the corner in terms of sales activity. The real question is when prices will turn around."

CAR's forecast is being presented today during the California Realtor Expo at Long Beach Convention Center.

"If anything has been surprising over the past year it's been the fact that California's median has fallen, not just rapidly, but by such significant margins," Kleinhenz said. "It's totally unprecedented. We've never seen double-digit, year-over-year decreases like this."