“2012 Housing Market Forecast” released by California Association of Realtors

California home sales and median price are predicted to improve only slightly in 2012, as the continuation of the tepid economic recovery, uncertainty about the future, and funding challenges forare expected to keep the market moving sideways, with little foreseeable momentum in either direction, according to C.A.R.’s “2012 California Housing Market Forecast” released Tuesday.

The forecast, which was presented today by C.A.R. Chief Economist Leslie Appleton-Young during her luncheon at CALIFORNIA REALTOR® EXPO 2011, says that California home sales next year is for a slight 1 percent increase to 496,200 units, following essentially flat sales of 491,100 homes this year compared to the 491,500 homes sold in 2010.

The California median home price will increase 1.7 percent in 2012 to $296,000 in 2012, according to the forecast.  Following a double-digit increase in the median price in 2010, the median home price will decrease a projected 4 percent in 2011 to $291,000. This seems to be in line with the Placerville, El Dorado County, California regions.

“2012 will be another transition year for the California housing market, as the continued uncertainty about the U.S. financial system, job growth, and the stability of the overall economy remain in the forefront for all market participants,” said Appleton-Young.  “An improvement in job growth, consumer spending, and corresponding gains in housing are essential to a broader recovery in the economy, but would-be buyers will remain cautious as they weigh these myriad uncertainties against the clear opportunities presented by today’s very affordable housing market.”

Video and more information at: http://www.car.org/newsstand/newsreleases/2011newsreleases/2012forecast/

Not Enough Gov’t Funds Went to Home Owners!

The federal bailout of the U.S. financial system, which was originally forecast to cost as much as $700 billion, is expected to cost far less than expected, according to a newly released congressional report.

The federal bailout, known as the Troubled Asset Relief Program (TARP), was launched by the Bush administration in response to the 2008 financial crisis and was to include aid to struggling home owners. But TARP is expected to now cost taxpayers about $25 billion because it did not accomplish all that envisioned to help home owners avoid foreclosure, a congressional panel said.

The Treasury Department allocated $45.6 billion for three major housing programs to help home owners, including the Home Affordable Modification Program (or HAMP), a refinancing program run by the Federal Housing Administration to aid underwater home owners, and a program designed to help hard-hit areas. But the Treasury Department only spent about $1 billion in TARP money for the foreclosure prevention effort, the panel noted.

Source: “TARP’s Lower Cost Reflects Troubles of Foreclosure Effort,” Dow Jones Business News (March 16, 2011) and “U.S. Senate Panel to Step TARP Oversight-Chairman,” Reuters News (March 17, 2011) 

Unfortunately this, along with restrictions from the Fed’s regarding loans in the Sacramento and Placerville, California regions continue to restrict economic recovery. Other related articles at: www.sierraproperties.com

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