California house hunters, perhaps spooked by a cooling job market, will balk at high prices and push homes sales down 12 percent, a Chapman University forecast shows.
Chapmans 2019 forecast predicts statewide sales of existing single-family and condos of 357,000 in 2019 — down 48,000 purchases in a year or a 12 percent drop. In 2014-18, sales averaged 407,400 annually. This outlook is harsher than the cooling seen by the California Association of Realtors: A 3.3 percent sales drop in 2019 after a 3.2 percent fall for 2018.
Chapman economists say affordability is a key issue. The statewide median price for a single-family home is forecast to be $592,000 in 2019, up 2.96 percent vs. gains averaging 6.38 percent yearly in 2014-18.
Builders will be cautious with 52,266 starts of single-family homes projected, down 7,936 or 13.2 percent drop. Still, its better than the average 49,445 starts in 2014-18.
Multifamily starts — primarily apartments — are seen hitting 57,916. Thats up 5,752 or 11 percent. In 2014-18, sales averaged 53,014 starts a year.
So those starts equal statewide construction of one housing unit for every 2.4 jobs created in 2019 vs. 2014-18 average of one unit per 3.7 new jobs.
Its enough new development to boost construction industry jobs by 9,000 next year — 1.1 percent growth. That hiring pace equals 2014-18s job growth.
Overall, California bosses are estimated to add 266,000 workers or 1.6 percent growth, Chapman says. In 2014-18, hiring averaged 394,250 jobs a year.
Manufacturing jobs will be flat. In 2014-18, hiring averaged 9,250 jobs a year.
The high-profile/high-wage information industry is seen adding 11,000 workers or 2 percent growth. In 2014-18, hiring averaged 19,500 jobs a year.
And leisure and hospitality businesses, often criticized for low pay, are forecast to add 16,000 workers, 0.8 percent growth. In 2014-18, hiring averaged 61,750 jobs a year.
Statewide income and spending should be robust, Chapman says.
Personal income will reach $2.61 trillion, up 5.25 percent vs. gains averaging 5.22 percent yearly in 2014-18. Taxable sales should grow to $747 billion, up 4.04 percent vs. gains averaging 3.9 percent yearly in 2014-18.