San Diego Housing Market Bottom?
San Diego housing market
Home prices are still a bubble compared to historic norm. According to Case Shiller index, we are still 20% above long term averages. Typical bottom comes at 20% below average. But this is not your typical recession. This is a deflationary crash. This is Great Depression material. These averages themselves are based on a money supply that was inflated by borrowing for many decades. When the money supply deflates, existing prices and salaries cannot be sustained.
Past generations paid less for housing compared to their income. Whatever you do, do not get into too much debt. If you want to buy, buy cash down or with a large down payment. Even if prices do not fall, in many cases, renting can be cheaper if you consider mortgage interest, property taxes, condo fees, maintenance, lost interest/investment income…
San Diego real estate
San Diego Home Prices Up – Home Sale Down
San Diego home prices
The real estate reporting firm MDA DataQuick, reported today that the San Diego median home prices rose slightly by $500 from October to November to $335,000.
Single-family resale homes rose $1,000, from October to $370,000, which was 1.4 percent above year-ago levels. Resale condos also rose, though the $218,000 November median was down 3.1 percent from November’s $225,000.
That was the good news. The bad news reported in the MDA Dataquick report was that San Diego home sales were down for the fifth straight month in a row! The actual drop was 6.7 percent on a year-over-year basis. This continued drop in San Diego real estate sales is very troubling and for me, and a much more important fact than the modest price appreciation. If this trend continues, it’s just a matter of another month or so before the San Diego median home values also turn down.
San Diego Housing Problem is Getting Worse
San Diego housing market
The number of delinquencies is a dynamic that obviously changes relative to the environment. I apologize for not providing some insight into the hard numbers that your above post requests. Where are we in this process and how much of the problem has already been written off? Is it getting worse, better, or going to be the same and for how long? Read more 
Trapped San Diego Homeowners
Bob Schwartz, San Diego California Realtor
Seems that all attention is paid to people who can’t afford to buy a home, even at the current depressed prices.
What about the large number of current San Diego homeowners with great credit, with the ability to comfortably meet a mortgage payment two or three times the one they are now paying? There are thousands, maybe millions, of homeowners who have outgrown their current homes, either physically or socially. They are held back by the drop in value of their present home. They have so much negative equity that they just can’t scrape together the huge pile of cash they would need to make a move. They sit quietly out of the market, making their monthly payments. They are the potential stimulus the economy needs to tap.
San Diego Homeowners Frozen Out Of The Housing Market
Bob Schwartz, brokerforyou.com
“If a potential buyer believes that housing prices may fall more, then mortgage rates of 3-5 percent won’t attract home buyers. Rates could even drop to zero and it might not outweigh consumers’ negative perceptions”
Or, more likely, consumers still couldn’t act on such low rates if they can’t sell their existing homes. This is is the fact the interest rate geeks don’t seem to get; rates alone don’t govern consumer behavior, some homeowners are frozen out of the market by circumstances…
San Diego Real Estate Market Bottom
San Diego real estate market
Sure enough at some point ( sooner if the government stop to intervene at the rate it has been ) San Diego housing prices will hit bottom and the inventory will start to diminish ; some time after that, construction will resume and the economy will very slowly but surely start to grow again in a meaningful way ; but politicians are too impatient and their actions will delay this natural process , however given time market forces will trump political shortcomings ( it may take a number of years ) ; yes, I would vote Republican in November, but not expect any miracles from their retaking charge .
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San Diego Housing Market Factors
A few San Diego real estate factors to consider:
- First the shadow inventory is massive, investor are not normally long term holders so additional inventory in the near future,.
- Increasing number of people per housing unit now and in the future.
- Changing sentiment that housing is not cracked up to be such a great holding after all.
- The costs of both purchasing & selling a home are substantial costs often not fully considered.
- Many have found that home ownership can be very expensive when you add up the maintenance, property taxes and insurance.
San Diego housing market
San Diego California Housing Double Dip
real estate double dip
In my 7-7-10 my post: San Diego real estate 2010 2nd. Half Outlook … double-dips I said that my local San Diego real estate market observations indicated that we are heading into a double dip for the real estate market.
Here is what Forbes just said: “The final figures for the U.S. housing market’s performance thus far in 2010 won’t be officially released for several weeks. But a review of the best preliminary data available indicates that the recovery in home values that began in early 2009 has stalled. A second dip is clearly under way in some places, if not across the entire U.S.” Read more
San Diego Real Estate – Buying Into A Declining Market
San Diego homes for sale
Now with the Federal real estate tax credits over, it may not be long before these tax credit buyers realize that buying declining real estate to get that taxable tax credit is a losing trade.. That little bit of “free” money ends up costing the investor a great deal more than the benefit.
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.