Los Altos Town Crier » Southern and Northern California realtors foresee a different market future

By Clyde Noel

Town Crier Correspondent

According to a first quarter survey published March 19 by the California Association of Realtors (C.A.R.), Southern California realtors are more optimistic about the future of the state’s housing market than their Northern California counterparts.

While 61.3 percent of the Southern California realtors expect sales activity to increase within the next half year, only 41.7 percent of the realtors in Northern California share the same view and they expect homes will remain on the market longer.

In contrast, 7.4 percent of the realtors canvassed in Southern California compared to 5.8 percent in Northern California project a decline in prices.

A substantial majority (67.3 percent) of the Northern California realtors predict a wider selection of homes this year. Only 47.5 percent of Southern California realtors shared that expectation.

Statewide, a majority of the realtors expect residential real estate prices to continue to appreciate in the next six months; only 5.5 percent foresee a decline. Almost one-third (30.9 percent) expect prices to plateau.

“The inventory of homes for sale, in a normal market, ranges from a seven to 10 months supply, but they hit record lows in 2001,” said Leslie Appleton-Young, vice president and chief economist for C.A.R.

In the fourth-quarter of 2000, inventory was down to 3.4 months compared to the 10 year average of 7.9 months. This constraint on the supply of homes impacted the median price and caused a price increase in nearly every region of the state. Despite last year’s low inventory, half of the respondents expect the number of homes on the market to increase in 2001.

Northern California realtors explain the fluctuation in the home real estate market as a result of the possible shift in the underlying dynamics of the Bay Area’s dot-com-driven marketplace.

The California Association of Realtors is one of the largest state trade associations in the United States with more than 97,000 realtors dedicated to the advancement of the real estate profession.