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Tuesday, October 20th, 2009Dear C.A.R. Member:
2009 has been a thought-provoking year for the real estate industry in California, both for REALTORS® and for our clients. In many instances, it has been a year without precedent. Like most of you, I’ve wondered what 2010 will bring. Many of my questions and concerns were addressed at the opening luncheon during CALIFORNIA REALTOR® EXPO 2009. C.A.R. Vice President and Chief Economist Leslie Appleton-Young deftly navigated her way through the Association’s official forecast for the 2010 housing market, putting today’s market into historical perspective and setting the stage for the future.
The upshot is that, statewide, we can expect the median home price to rise 3.3 percent to $280,000 in 2010, while sales will moderate to a more sustainable pace, posting a 2.3 percent decrease next year. 2010 should mark the beginning of a “new normal” for California’s housing market, and likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.
C.A.R.’s forecast was widely reported in the news media, and we’ve posted our news release online. You’ll also find links to Leslie’s PowerPoint presentation and a chart tracking the trend in home-price appreciation since the 1970s.
The 2009 market presented a unique opportunity for first-time home buyers. Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide.
Unfortunately, the federal tax credit for first-time home buyers is set to expire next month on Nov. 30. Yet research shows that the First-time Home Buyer Tax Credit arguably has been the most successful component of the federal government’s efforts to stimulate the U.S. economy. According to a study conducted by C.A.R. to gauge the role the federal tax credit played in the California market, nearly 40 percent of first-time home buyers reported they would not have purchased a home without the tax credit. Nearly 70 percent of recent first-time home buyers surveyed said the tax credit was “the most important” or a “very important” factor in their decision to buy a home. You can access the study online.
As the expiration date for this successful program looms, it is imperative that all REALTORS® take action by contacting their congressional representative today, and urge them to extend this vital home-buying incentive. It’s easy to do. Call (800) 961-3302, enter your NRDS ID, and you’ll be directly connected to the office of your congressional representative. Ask your congressional representative to vote for extending the First-time Home Buyer Tax Credit through 2010 and to include all home buyers — not just first-timers. Historically, housing has led the nation out of economic downturns, and can do so again. Clearly, the tax credit played a critical role in driving home sales this year and in making the dream of homeownership a reality for many. By contacting our congressional representatives, we can make a difference in Washington, and help ensure the successful passage of this critical legislation.
Your Governmental Affairs staff monitors almost 3,000 pieces of proposed legislation each year that may have a direct impact on the real estate industry and your ability to conduct your business. It’s more important now than ever to become involved in the political process – but more about that next time I write to you. Until then, don’t forget to exercise your right to vote Nov. 3.
Sincerely,
James Liptak
2009 President
CALIFORNIA ASSOCIATION OF REALTORS®
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