State Realtors forecast price drops

‘Home prices across the state will continue to drop next year, even as sales, spurred by the low prices on foreclosed properties, will keep rising in 2009, according to a California Assn. of Realtors forecast slated to be released today. CAR projects that the median price of an existing California home will decline 6% to $358,000 in 2009. That’s a smaller drop than the association is anticipating for this year, which looks to bring a 32% decline. The median price -- the point at which half the homes sell for more and half for less -- peaked in 2007 at about $558,000.Prices won’t start to head up, the association said, until more houses are sold, and there are fewer remaining on the market. In January, there were so many homes for sale in California that it would have taken 16.9 months to deplete the supply -- and that’s not even counting the new homes that were likely to come on the market during that time, according to CAR. In August that ratio declined to 6.7 months, aided in part by the spike in sales activity in Riverside and San Bernardino counties.But additional notices of default and foreclosure are expected in 2009 when a new wave of adjustable mortgages will reset. That will continue to push down the median prices of homes statewide, possibly into 2010, said Raphael Bostic, an associate professor at the USC Lusk Center for Real Estate.