After two years of gains, home sales in California are expected to fall 10 percent this year but prices should continue to rise.
The California Association of Realtors expects 492,000 sales this year, compared with 564,500 in 2009. C.A.R. predicts that sales activity will rise next year to 502,000 as the recovery regains momentum.
Sales increased by 27 percent in 2008 and 24 percent in 2009 after two sharp years of declines as the real-estate market collapsed.
"We have had weaker economic activity in the second half of this year as we have weaned ourselves from the federal government stimulus programs," Robert Kleinhenz, the association's deputy chief economist, said during a conference call.
The Los Angeles-based trade group expects next year's median to grow a modest 2 percent to $312,000.
The increase follows price decline of 38 percent in 2008 and 21 percent in 2009. Los Angeles County market should closely track the state, Kleinhenz said.
There were 60,000 home sales in the county last year and they should fall 24 percent this year, due in large part to the end of the federal tax credits. Modest gains should return next year, Kleinhenz said. The median price is on track to increase 5 percent this year and make a similar gain next year, Kleinhenz said. There was also word on Monday that the nation's residential housing market remains under pressure. The National Association of Realtors said that its index of sales agreements for previously occupied homes rose 4.3 percent to a reading of 82.3 in August. That's still more than 20 percent below the pace in the same month a year ago. "With underlying economic conditions still so weak, a robust housing recovery remains highly unlikely," Paul Dales, U.S. economist at Capital Economics, told the Associated Press.