The home real estate outlook is good for the rest of this year in California overall: Building permits up 5.2%. Median price up 9.5%. Home resales down 7% after a spectacular 2002. War and a soft economy won't have much impact.
But it pays to read between the lines of forecasts lumping all real estate together.
Prospects vary from region to region.
Inland Empire is once again a standout, one of the nation's healthiest markets. Expect 23,000 new-home sales, same as in 2002. Construction can't keep up with growing demand.
Homes in desert areas will sell easily. In the past year, High Desert sales soared 32%. San Diego should do very well...better than the state average. Building permits are about 34% ahead of 2002 and will keep up that pace. New condos and apartments being built downtown will fill up rapidly. The 3000th home in the new Otay Ranch development was sold this year.
Strong sales in the Central Valley can be expected as builders and home buyers take advantage of new jobs, cheap land and low prices.
But Sacramento will lose a little luster as a housing hot spot. Many homes are going up just as technology and government jobs decline.
Stockton-Tracy area, too. Fewer workers are making the long commute to Silicon Valley.
The Central Coast looks very soft. Monterey and Ventura County sales are way off.
L.A. and Orange County will do better as the national economy picks up later in 2003. Volatile Westside L.A. and south Orange County will rebound this year from a technology slump. But high-end homes will be for sale longer.
The Bay Area's prospects are weakening. The region can't sustain the 11% price gains of last year. Don't look for a bursting bubble, but DO expect lower prices in the months ahead.
Silicon Valley, especially, is hurt because 18% of jobs are gone. In February, 5700 homes were on the market, but only 1000 were sold.
Apartment rents will be all over the lot...rising by 12% in L.A. and 8% in Orange County, but plunging in the San Francisco Bay Area. There's a big shortage of multifamily housing in Southern California, though some is being built in big cities, according to USC's Lusk Centercolor>. The scarcity is making apartments and condos attractive to investors.