Housing Affordability Forecast
14
Median Price/Per Capita Income
12
10
8
6
Highlights: Housing and Construction As emphasized earlier, the outlook for California
this ratio is skewed somewhat by the inclusion of non-homeowners, who traditionally drive the per
Q1-10
Q3-09
Q1-09
Q3-08
Q1-08
Q3-07
Q1-07
that makes sense. Housing Market Forecast Home Price
Home Sales
600,000
140,000
500,000
120,000
400,000
100,000
300,000
80,000
200,000
60,000
100,000
40,000 Q1-95 Q2-96 Q3-97 Q4-98 Q1-99 Q2-00 Q3-01 Q4-02 Q1-03 Q2-04 Q3-05 Q4-06 Q1-07 Q2-08 Q3-09 Q4-10 Q1-11 Q2-12 Q3-13 Q4-14 Q1-15 Q2-16
the last several decades. It’s important to note that
Q3-06
balance sheets, home prices have returned to a level
Median Home Price (SA)
between six and seven times per capita income over
Q1-06
in prices has been for many Californians’ individual
values when the housing bubble burst, California’s
driven primarily by incomes in the state, averaging
Q3-05
was clearly unsustainable. As painful as the downturn
example. Despite the precipitous decline in home
it had been in several years. Home prices have been
Q1-05
more than 12 times per capita income—a level that
remains positive at this writing. Housing is prime
housing market was healthier as of mid-2011 than
Q3-04
Q1-04
Q3-03
Q1-03
During the housing bubble, home prices shot up to
Home Sales (SA)
F o r ec a s t
Q3-02
Q1-02
Q3-01
Q1-01
Q3-00
Q1-00
Q3-99
Q1-99
Q3-98
Q1-98
Q3-97
Q1-97
Q3-96
Q1-96
Q3-95
Q1-95
4
capita income figures downward. As a result, Beacon Economics is forecasting that home Still, this ratio was confined to a relatively stable range
prices will begin to grow slowly, but that growth will be
from the mid-1970s through the turn of the century.
tepid at best. In 2012, we will see home price appreciation
C a l i f o rn i a ’ s E c o n o m i c O u tl o o k
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12/13/11 4:12 PM