California real estate market situation is more than paradoxical. On the one hand the homeownership rates statistics puts the state at No. 48 in the United States. On the other hand 19 of 25 US cities with the least number of homes for sale are in California. "While the increase in interest rates will be enough to moderate the pace of home sales, population and household growth will continue to put pressure on home prices, resulting in greater price appreciation in California compared with the nation," C.A.R. Vice President and Chief Economist Leslie Appleton-Young, said. Traditionally the areas of the greatest prospect for home sales increase are the inland regions of the state - the Central Valley and the Inland Empire region in Southern California, which have seen significant population growth in recent years as well as steadiness of a new home-building activity, said Appleton-Young. "The Southern California housing market in 2005 is likely to slow from the torrid pace of sales and rapid price appreciation that we experienced throughout most of this year," she said. The San Francisco Bay Area real estate property for sale which is advanced at a more measured pace than it is in other regions in the state this year, is likely to experience less cooling in 2005 compared with other areas of the state, Appleton-Young said. The median home price in the San Francisco Bay Area, traditionally the costliest market in the nation, stands at $666,740, according to the California Association of Realtors. Observing the current real estate market situation, partially reflected in his property listings, Scott Harrison, Bay Area real estate agent notices that things are as tight as they have ever been. ''Last year at this time I had 80 MLS. This year I have 43,'' Harrison said. Harrison has pushed up the price for three-bedroom, one-bath home $30,000 more after receiving nine offers on this house. Local authorities have approved range of bills toward making things different. Cities started developing new houses and lofts on empty lots and in abandoned warehouses. Both the state Senate majority leader and Gov. Arnold Schwarzenegger have proposed easing a landmark California environmental law to encourage home construction. Read also: Real estate market: construction boom in Miami Hot real estate market in the valley of the Sun Florida real estate has survived Real estate market prospers in Florida