Thinking of buying? Median price likely to dip next year

After years of steep increases, homeowners can expect a modest decline in price appreciation next year, according to the California Assn. of Realtors’ 2007 California Housing Market Forecast, which was released Oct. 18 at the trade group’s annual expo in Long Beach. The sales pace is expected to continue to slow as well.

The median price of a California home will slip 2% to $550,000 in 2007, compared with a projected median of $561,000 for this year.

Sales for 2007 are expected to fall 7% to 447,500 units, compared with 481,200 units in 2006.

The conflicting expectations of home sellers hoping to get maximum profits and buyers holding out for better prices, something that has affected the market this year, will still be a factor next year as consumers adjust to the changing market, said the association’s president, Vince Malta.

“Looking to 2007, we expect that some regions of the state, including the Central Valley, San Diego and Riverside-San Bernardino regions, will experience sales declines greater than the state as a whole,” said Leslie Appleton-Young, the association’s chief economist, in a release. “That also holds true for several second-home markets, including the desert areas of Southern California and the wine country.”