San Diego Housing Recovery?
San Diego housing
Considering some San Diego home prices are off 40%+, large home buyer credits are available, home interest rates are near 40 year lows, and the seasonably high time to purchase real estate is here, a small uptick in median San Diego home prices should not be a surprise.
But, a number of builders report that any recovery in housing demand seen over the past few months is predominantly coming from the low end of the market, where government programs and tax incentives for first times buyers coupled with very low interest rates have brought out buyers. However, in the upper end of the market, rising unemployment (which likely will continue for some time), a huge oversupply of units, tougher mortgage terms and higher rates for jumbo mortgages (above $470,000) make it highly likely that more pain is ahead.
The only things that will lead the housing market to recover are real economic growth and inflation. Both of these will tend to increase nominal income of potential buyers and make housing at any given price level more affordable. Inflation tends to create higher interest rates which will create higher mortgage payments(as well as all sorts of other undesirable effects) so it is somewhat of a double edged sword. We really have to focus on getting the economy growing again – if we succeed, the housing market will take care of itself; if we fail, there is really no way the housing market will recover.
San Diego home listings
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People thought the recovery would start after the election. I believe that you cannot expect rapid growth for a number of years, however normal growth on a smaller scale is very doable. I believe it will vary from region to region and even from neighborhood to neighborhood in many instances in large cities as this really is a local business.
San Diego real estate brokerage
The issue at the core of the recovery is how long it will take to get the number of qualified buyers back. We have lost many homebuyers. All the people in foreclosure can’t buy for at least 3 years because of bank guidelines. Then they will have to save the money too. Plus we have taken some investors out of the market. At what point will new home buyers equal the old foreclosed people is the answer to when the market will come back. My guess is 3 to 5 years.
Los Angeles bail