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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (14792)	11/3/2003 7:46:00 AM
From: biometricgngboy	Respond to of 306849

Study: Home prices to soar By RACHEL RASKIN-ZRIHEN, Times-Herald staff writer The price of an average home in the Vallejo area will hit a half-million dollars in the next 10 years, according to a national financial real estate analysis firm. At least one local real estate agent, however, says it'll happen sooner than that. Mike Sklarz, real estate economist for Hawaii-based Fidelity National Financial, said he crunched the numbers and the chart he developed shows home prices leveling out, then heading up again in the next few years. Sklarz said his 20 years of research into real estate trends helped him develop a model with which to predict what home prices are likely to do. And based on historical data for the Vallejo-Fairfield-Napa Primary Metropolitan Statistical Area, Sklarz said homebuyers in this area probably won't see lower prices for many years. Sklarz said he has developed models for more than 300 statistical regions nationally, including the Vallejo-Fairfield-Napa area. Sklarz said his numbers are based on historical data and the assumption that mortgage rates will stay at 6.5 percent to 7 percent. "In 1979, the median price of a single-family home in the Vallejo area was $63,000," Sklarz said. "Prices peaked in 1992 at $168,110 and then began declining for the next six years. The low point was in 1996, when the average price was $156,510." Sklarz said median home prices in the area began rising in 1997, jumping 4.5 percent from the previous year. They jumped nearly 10 percent the next year, and in 1999, made a sharp 15.6 percent spike, he said. In 2000, he said, the trend continued with prices jumping almost 25 percent, and they have gone up steadily since, rising almost 15 percent in 2001, nearly 9 percent in 2002 and 11.5 percent so far in 2003. The median price of a home in the area now, Sklarz said, is $362,000, adding that if his model is correct, prices will even out over the next six years. "I expect to see a spike in prices in 2009," said Sklarz, adding that the median price should continue to rise from that point until it passes the $500,000 mark in 2013. Sklarz's firm recently released a report showing homes in the Vallejo area are overvalued by nearly 26 percent, making it the eighth most overvalued community in the nation. Sklarz said employment growth and affordability are the two main factors driving home prices, and his forecast for this area is characteristic of much of the region. Realtor Curtis Lafferty, of Vallejo's Century 21 Schuljer Realty, said he doubts Sklarz's predictions. "He's really bold to make this type of prediction," Lafferty said. "I think he's following the real estate curve and going back historically. But I don't see prices going down or even leveling off at this point. I see an extremely active market. "People have been saying that - 'It's going to start slowing down now' - for the past several years, and it hasn't happened yet," Lafferty added. "I think we'll hit the $500,000 mark sooner than 2013." timesheraldonline.com