Realtors see a cooling-off

The rate of home-price appreciation will moderate in ’06 after four years of steep increases, and sales will dip slightly from this year’s pace, the California Assn. of Realtors predicted last week.

The trade group’s “2006 Housing Market Forecast” also said housing affordability will likely continue to decline, pushing some families out of state.

The median home price in California is expected to increase 10% to $575,500 in 2006, compared with a projected median of $523,150 this year, while sales are projected to reach 630,610 units, falling 2% compared with 2005, according to the forecast.

The double-digit gain in the median price of a home, which California has experienced for most of the last five years, will again be fueled by a continuing shortage of housing, the group’s economists predicted.

The state gains nearly 250,000 households yearly, but about 200,000 housing units are built.