California: Slower Rise in Home Prices Forecast

By: Annette Haddad: REALTOR® Magazine Online
The CALIFORNIA ASSOCIATION OF REALTORS® expects the statewide median home price to rise about 10 percent to $575,500 in 2006, marking the second consecutive year of slower home-price growth.

CAR Chief Economist Leslie Appleton-Young says the projected appreciation rate for this year is 16 percent, down from 18 percent in 2003 and 21 percent in 2004. However, the direction of home prices hinges largely on location.

DataQuick Information Systems notes that prices are up over 30 percent from last year in downtown Los Angeles but are posting more modest gains and even declines on the Westside.

Additionally, coastal areas are showing signs of weakening, while reasonably priced inland communities continue to record double-digit appreciation rates.