[posted @ 8:17 AM] I’m down in San Diego right now for the California Association of Realtors board of directors meetings (of which I am a board member), so I have a piece today from the San Diego Union-Tribune.

CAR’s economist, Leslie Appleton-Young, is predicting a slowing market, but not due to price decreases… Rather due to price increases and the fewer number of people that can afford to live in the state.

“In her forecast for 2006, Appleton-Young anticipates a 2 percent statewide decrease in single-family home sales. She predicts a 10 percent increase in the cost of a median-priced home to $575,500. Healthy by normal standards, that’s well below the levels of recent years.”

“Home prices in many California markets have doubled since 2000. Young said the increase in home equity has created a fiscal disconnect between established homeowners and those seeking to buy their first dwelling.”

“For the first time in history, households on a mass scale have tapped into that equity,” she said.

Owners who purchased before the current price boom got under way now are thinking of retiring early, buying a second home or purchasing a condo for their children, she said. “They have the means.”

[updated @ 3:21pm] Kelly Zito did some further research on this in today’s Chronicle. “Although overall home price appreciation for 2005 appears to be in line with expectations, the [CAR's] outlook generally has proved too conservative. In its forecast for 2004, the group said prices statewide would increase about 13 percent, and they rose more than 20 percent.”

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