California Home Prices Seen Dropping 2% in 2007

The housing market continues its downturn with a nearly 12 % decrease in the number of houses sold in September 2006, compared with 2005.

The median home price in California will decline 2 % to $550,000 in 2007.

The housing market clearly downshifted in 2006 from the record-setting sales and robust price gains of the last few years. The residential real estate market in 2006 was characterized by a gap between buyer and seller expectations. Sellers sensed that the peak of the market was approaching, yet still hoped to obtain the highest possible prices. Buyers' sense of urgency waned as the number of homes on the market grew and they took longer to identify and subsequently purchase a home.