SLO County News BlogGolf, Wine, Real Estate, Business & Travel NewsSLO Housing Gains in 2006Wednesday, September 21, 2005Driven by a strong demand for housing, single-family homes in San Luis Obispo County will continue to appreciate in 2006, say economists for the California Association of Realtors."Prices there are still relatively affordable compared to coastal metro areas like the San Francisco Bay and Los Angeles," said Leslie Appleton-Young, vice president and chief economist for the association, which released its 2006 Housing Market Forecast this week. "It's a very attractive destination for retiring, and I think in general you'll outperform other areas of the state." But residents may not see the huge increases in home value of the past four years. The association predicts that home prices across the state will cool next year. Sales also are expected to decline slightly. In 2006, California's median home price -- the statistical point where half of the homes sell for more and half for less -- will increase 10 percent to $575,500, compared with a projected median of $523,150 this year. Sales are projected to reach 630,610 residences, a drop of 2 percent from 2005, according to the association forecast. "I would feel comfortable letting people know that we don't expect to see a bubble," Appleton-Young said. San Luis Obispo County "will be characterized by a supply shortage more than anything," she said. "More people want to come than you have homes to place them in." The median price of a home in San Luis Obispo County was $559,900 in July, an increase of nearly 24 percent from July 2004, when the median price was $452,270. The California Association of Realtors will release the county's median home price for August on Monday. In July, housing affordability remained at a record low. Just 10 percent of San Luis Obispo County residents could afford the median-priced home. Jim Hamilton, the association's president, said higher home prices and interest rates will push affordability even lower. "We expect the fixed mortgage rate to rise to 6.4 percent next year, and the adjustable rate to hit 5.1 percent," he said, "which will make it more difficult for many families in California to be able to afford a home." From Biz Buzz, The Tribune, Julie Lynem To see more of The Tribune, or to subscribe to the newspaper, go to www.sanluisobispo.com. (c) 2005, The Tribune, San Luis Obispo, Calif. Distributed by Knight Ridder/Tribune Business News. Read More
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