San Diego Home Prices – The Key To The Future Trend
San Diego home price
San Diego home prices: will they improve, stabilize or continue to erode? Anything can happen especially when you consider there are potentially another 8 million homes that could be foreclosed on in the next 4 years. However, if you look at the current national average home price it is back to around 2003 levels, which is before homes values began to increase by double digits, the norm being 3-5% year prior to this.
The key to housing stabilization/improvement is job creation. Once the unemployment stabilizes and reverses, home prices will level out. The longer it takes for unemployment figures to improve, the lower home prices will go.
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This was a good post; I am not sure if I have anything positive to say. First off, growth in home prices over the past few years was unnatural too. There were things in the mix that caused the free market system not to work, or maybe better said, “balloon.” There was government trying to create more tax revenue by relaxing monetary guidelines, the fed was keeping interest rates low on an artificial basis and then there were the promoters- Realtors, Mortgage companies, builders and the media to name a few, who pushed the notion that you could get a home for free. The risk reward portion of the equation was taken out. Now we face an industry that is broken and may not recover for quite awhile.
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I read a Goldman economist said that housing prices would nationally be 5% lower if the government didn’t get involved. So the prices in Nebraska, South Dakota, Idaho might be similar to what they are now, but the prices in say Miami, Vegas and Phoenix might be 20% lower… Who knows what the real number is, but 5% is pretty noteworthy. That also doesn’t factor in that housing prices still might go even lower ( I think they will).
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Consumers, investors and all other people who are not underwater (which remains a segmented question) do not want to realise the loss on their home but instead would rather choose to use it for practical reasons or seek yield however small.
This could certainly prevent a further 40%+ slide in the residential market. And when you see the forced sellers exit the market (like now) there should be a degree of stabilization. The same way that the market got exhausted from buying, there will be an exhausted seller who would rather sit on a house for 10 years than lose 40%.
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