Contra Costa Homes and Real Estate

Dear Clients and Friends!

Happy 2006! Last year was a very good year for the housing market here in

Northern California

. The California Association of Realtors (CAR) December Trends Report says that low interest rates and new loan products have “unleashed the state’s demographic forces in recent years and enabled the

California

housing market to reach new heights 4 years in a row.”

The state is poised to establish new records for sales and the median price in 2005, stretching the longest housing market uptrend to 10 years. The market and economic fundamentals of recent years will remain mostly intact in 2006, giving rise to a cautiously optimistic outlook for the year to come.

Sales of detached existing single-family homes in 2005 are likely to eclipse the record-setting sales pace of 2004 of 624,740 units, with an anticipated 1.8 percent increase to 635,000 units. Sales have risen in 8 of the past 10 years, making this the longest in the 35-year history of C.A.R.’s housing statistics.

So what lies in store for 2006?

The market and economic conditions that gave rise to an outstanding 2005 performance will generally prevail again in the year to come and contribute to another very good year, according to CAR.

With inflation in check, fixed rates in 2006 should increase only slightly and fall in the low to mid-6 percent range. Adjustable rates, which rose moderately in 2005 in response to increases in the federal funds rate, should also increase slightly in 2006. Overall, the interest rate environment will remain favorable for the year.

However, with high home prices, more and more households will need to stretch their purchasing power with innovative forms of financing in order to buy a home in 2006. The median price statewide will rise 10 percent to a new record of $573,500. Coastal regions of the state are expected to see weaker price appreciation and sales than for the state as a whole, while faster growing inland regions will see a somewhat stronger performance than that of the state.

If you are interested in selling your home in 2006 or perhaps purchase a second home, let’s start discussing your options right now! Call me today for a complimentary analysis of your home’s value or to assess the second home or investment market.

Catherine Myers, Realtor

925-627-3027

Alain Pinel Realtors

Walnut Creek, CA

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