Cost of California homes may rise

Associated Press

LOS ANGELES — The soaring cost of an existing single-family home in California is expected to increase another 10 percent in 2003 to a median price of $344,300, the California Association of Realtors said yesterday.

This year's estimated median price of $313,000 is 18 percent above the $265,400 in 2001.

CAR's annual forecast also said the torrid pace of home resales earlier this year is expected to help produce a record 547,300 purchases by the end of 2002.

A decline in home resales of about 3 percent is anticipated in 2003. But prices will continue to rise in part because state population growth is outpacing housing construction, the group said.

"The pace of home sales should return to more sustainable levels in 2003, while the overall health of the residential real estate market will depend on regional job growth and continued favorable interest rates in the coming months," said CAR president Robert Bailey.

About 150,000 new housing units are built each year in California, but the state adds more than 220,000 households.

CAR's outlook is based in part on a UCLA economic forecast of a 1.7 percent increase in personal income in California next year, following declines of 1.3 percent in 2001 and 1.4 percent this year.