Monday, December 20, 2004

Housing Growth or Burst (California)

ABC News

Depending on who you talk to, the valley's housing bubble is either about to burst, or continue its rapid growth. Despite interest rate hikes and a sluggish economy, the California Association of Realtors says statewide home prices are up 21 percent over last year.

In the Bay Area, prices are up 15 percent.

And in LA up 24 percent.

But one of the hottest regions is the Central Valley, up 28 percent.

Top realtors came together in Fresno to discuss where the market is headed next.

Fresno's housing market exceeded all expectations this year

Jim Hamilton is the President of the California Association of Realtors. He says while some have predicted valley housing prices will fall sharply in 2005,.he disagrees. "While we don't expect that trend continuing over the next year, to see those numbers that high, we still think you'll out-pace the state, which is up 15-percent."

Hamilton says a gradual slowing of the market would be healthy. But a study in the Wall Street j\Journal called Fresno the 12th most over-valued market in the country, a place where housing prices could fall 20-percent in the next two years.

"There's always going to be someone out there that's going to say there's a housing problem. We just don't see it. The demand is still high. I think it will be predicated on interest rates but we don't see interest rates increasing dramatically in the near future."

Local realtors agree. They don't see a real estate bubble ready to burst. a big concern among many homeowners. I really don't believe they should worry. I just think they should be grateful for the appreciation that they've had. We don't see a downward trend."

The Fresno market didn't see much appreciation for many years and now the housing market is catching up to other parts of the state.

Fresno area home prices are still among the lowest in California at just under 3-hundred thousand and that is the real reason, many realtors say is keeping our market hot.


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