11:02am | California home sales and prices will improve slightly in 2012, according to a forecast issued by the California Association of Realtors on Tuesday.

The forecast states the market will see only modest increases due to “the continuation of the tepid economic recovery, uncertainty about the future, and funding challenges for residential mortgages,” which authors of the report say “are expected to keep the market moving sideways, with little foreseeable momentum in either direction.”

C.A.R.’s “2012 California Housing Market Forecast” calls for California home sales next year to rise 1 percent increase to 496,200 units, following essentially flat sales of 491,100 homes this year. Projected home sales for 2011 nearly equal to the 491,500 homes sold in 2010.

California’s median home price will rise 1.7 percent to $296,000 in 2012, according to the forecast. Following a double-digit increase in the median price in 2010, the median home price will decrease a projected 4 percent in 2011 to $291,000, according to C.A.R.

“Despite the run of unforeseen global events in the first half of this year that slowed the overall economy, 2011 home sales are projected to essentially remain unchanged from last year,” C.A.R. President Beth L. Peerce said in a statement.  “Looking ahead, the fundamentals of the housing market – such as low mortgage rates, high housing affordability, and favorable home prices – are expected to continue, but at this point, a strong housing recovery will depend on consumer confidence, job creation, and the availability and cost of home loans.”

Richard Daskam, a Keller Williams Realty agent who works extensively in Long Beach and Signal Hill, said he’s glad that any increase at all is called for.

“I’m glad to see that the forecast is for the median prices to increase 2012, even if it is 1.7 percent,” Daskam said.

It’s all about perception, which is keeping a lot of potential buyers out of the market, said Gina King, with Keller Williams Pacific Estates in Long Beach

“This just goes to show you how powerful consumer confidence can be,” said King, who along with Joanne Morris and Eric Bryant market themselves as the Long Beach Coastal Team. “Statistically, mathematically, logically there has never been a better time to buy a house, for those who can afford to. But therein lies the irony: while prices, interest rates, and availability are in a perfect storm, Americans are struggling to make their monthly Nut. Let alone, consider the possibility of dipping into savings for a down payment. Cash investors and foreign money continue to lead the way in transactions, and though we certainly need this activity, it’s so sad that American families are not the ones taking advantage of this moment.”

Daskam agrees that consumer confidence may be a driving force behind suppressing prices and sales now and into next year.

“Personally, I’ve got several buyers who I worked with this year who have decided to step back and watch the market for a while,” he said. “Since interest rates are predicted to stay low for the next year or so, these buyers don’t feel the need to jump back into the market. They haven’t found their idea of the perfect house yet and have decided to wait for the right one to come along rather than settle. If the majority of buyers decide to do this, we could certainly see a seller’s market once the buyers jump back in. We saw this occur in 2009 when the federal government was using the stimulus money to encourage first-time homebuyers.”