Full-Speed Ahead 2014

Full-Speed Ahead
2014 California Housing Market Forecast
By Jeannette Brown

The housing market has made great strides with marked improvements over the past year, and this trend is expected to continue into 2014, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2014 California Housing Market Forecast.”

The positive signs outlined by the forecast point to strong demand for homeownership, and both sales and home prices will experience further gains. The California median home price is forecast to increase 6 percent to $432,800 in 2014, following a projected 28 percent increase in 2013 to $408,600. In addition, sales will shift toward primary home buyers after a period of time in which buyers faced stiff competition from investors. The state can expect to see sales gain 3.2 percent next year to reach 444,000 units, up from the projected 2013 sales figure of 430,300 homes sold.

C.A.R. Vice President and Chief Economist Leslie Appleton-Young commented the following:

“We’ve seen a marked improvement in housing market conditions in a year with the distressed market shrinking from one in three sales a year ago to less than one in five in recent months, thanks primarily to sharp gains in home prices. As the market continues to improve, more previously underwater homeowners will look toward selling, making housing inventory less scarce in 2014. As a result of these factors, we’ll see home price increases moderate from the double-digit increases we saw for much of this year to mid-single digits in most of the state.”

While overall the forecast is positive, there are still some lingering issues that could have an impact on the health of the market. For instance, federal, fiscal, monetary and housing policies – such as the mortgage interest deduction and mortgage finance reform – could have a detrimental impact. Limitations presented by the housing supply and the actions of the Federal Reserve are also causes for concern.

That being said, mortgage interest rates will remain at historically low levels, even with a projected rise to 5.3 percent for the average 30-year fixed mortgage interest rate.

And it’s not just the housing market that will see improvements in 2014. C.A.R.’s forecast also projects growth in the U.S. Gross Domestic Product of 2.8 percent in 2014, after a projected gain of 1.8 percent in 2013. With nonfarm job growth of 1.9 percent in California, the state’s unemployment rate should decrease to 8.3 percent in 2014 from 9 percent in 2013 and 10.5 percent in 2012.

C.A.R.’s latest forecast builds on the positive signs that the economy is experiencing as it enters the fourth year of a modest recovery.

Average Price Per SQFT in Fontana

Average price per square foot for Fontana CA was $163, an increase of 26.4% compared to the same period last year. The median sales price for homes in Fontana CA for Sep 13 to Dec 13 was $290,000 based on 449 home sales. Compared to the same period one year ago, the median home sales price increased 23.7%, or $55,500, and the number of home sales decreased 9.8%. There are currently 361 resale and new homes in Fontana on Trulia, including 6 open houses, as well as 892 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Fontana CA was $306,616 for the week ending Dec 04, which represents a decrease of 0.6%, or $1,822, compared to the prior week.

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Short Sale News

December 4, 2013 The good news just keeps continuing. As we anticipated, C.A.R. today received a letter from the California Franchise Tax Board (FTB), obtained by the State Board of Equalization, clarifying that California families who have lost their home in a short sale are not subject to state income tax liability on debt forgiveness “phantom income” they never received in a short sale.  Last month, in a letter to California Sen. Barbara Boxer, the Internal Revenue Service (IRS) recognized that the debt written off in a short sale does not constitute recourse debt under California law, and thus does not create so-called “cancellation of debt” income to the underwater home seller for federal income tax purposes.  Following the IRS’s clarification, C.A.R. sought a similar ruling by the California FTB.  Now with the FTB’s clarification, underwater home sellers also are assured that they are not subject to state income tax liability, rescuing tens of thousands of distressed home sellers from California tax liability for debt written off by lenders in short sales. We are pleased with the recent clarifications issued by the IRS and the California Franchise Tax Board, which protect distressed homeowners from debt relief income tax associated with a short sale in California.  We would like to thank Sen. Boxer and BOE member George Runner for their leadership in obtaining this guidance from the IRS and FTB.  Distressed California homeowners can now avoid foreclosure or bankruptcy and can opt for a short sale instead, without incurring federal and state tax liability, even after the Mortgage Forgiveness Debt Relief Act of 2007 expires at the end of this year. Sincerely, Kevin Brown 2014 President CALIFORNIA ASSOCIATION OF REALTORS®

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2013_Fall_Brochure_Online

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Home prices

The median sales price for homes in Fontana CA for Jul 13 to Oct 13 was $285,000. This represents an increase of 8.8%, or $23,000, compared to the prior quarter and an increase of 26.7% compared to the prior year. Sales prices have appreciated 9.6% over the last 5 years in Fontana. The average listing price for Fontana homes for sale on Trulia was $309,050 for the week ending Oct 16, which represents an increase of 1.1%, or $3,359, compared to the prior week and an increase of 0.2%, or $753, compared to the week ending Sep 25. Average price per square foot for Fontana CA was $161, an increase of 27.8% compared to the same period last year

Media Release City of FONTANA