San Diego Real Estate Correction is Not Over
San Diego California real estate market
San Diego real estate sales, after the just expired tax credits, look like they are about to soften again. It would seem that the federal tax credits merely postponed, delayed, or softened a meaningful and inevitable correction. Plus, I don’t know if low interest rates alone will keep existing home sales on the upswing,
Don’t be fooled by the upcoming home sales reports because many of the homes that went under contract in April had closings scheduled for May and June.
Just like we saw with Cash for Clunkers, these government cash programs just pull sales forward with little real new sales. “Expect a payback in July and August,” said Zillow economist Humphries, “A lot of current demand in the marketplace has been stolen from those months.” “The period of sustained, dramatic declines in home values is over in most markets,” Humphries said. “We’re entering, now, a period of negligible price appreciation which will last for the next three to five years.”
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I agree with your comments and I’ll take it a little further. As a mortgage banker I attend most of the marketing sessions in north county. Under the heading of buyers wants and needs I’m hearing alot of “all cash buyer”. Really? Would that be another investor? I hate to say it but until the jobs market catches up with inventory we aren’t going to see the market take off and sustain it’s movement. Investors buying things up is good in the short run but it creates another inbalance. Why do you think there are so many short sales and foreclosures?What we need are buyers who are taking possession as their primary residence to see a stabilization of the market. That is directly related to jobs. People that have good paying jobs are the ones who are qualifying for a loan. I work with many of the top agents in North County and this seems to be the consensus.
Economics is albeit man-made but also natural. I say the government stops interfering with the market and let those magical hands do their work. If we keep interrupting the natural developments of the economy, we may end up actually extending the period of actual recovery.
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