What's Ahead For Home Prices

 California remains ahead of the nation in market recovery with many first-time home buyers entering the

market due to affordable home prices, low mortgage rates, and first-time home buyer tax credits. However, credit still is tight and unemployment remains high, which could hinder a full market recovery until 2011.

KEEP THIS IN MIND

• Home sales in California hit bottom more than two years, and the median home price of an existing,

single-family home reached its trough in February.  In November, the state’s median home price rose in year-to-year comparisons for the first time since August 2007.

• C.A.R.’s closely watched "2010 California Housing Market Forecast,” projects that the median home

price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of

$271,000 in 2009.

• Some economists are forecasting another surge of foreclosures in 2010. However, C.A.R.’s

economists expect that foreclosures will remain flat this year compared with 2009.

• Government efforts to maintain a low interest rate environment have stabilized the market. However,

a mortgage analyst at a financial publishing company predicts that rates likely will rise to high 5 percent by the end of 2010.