July 12, 2024

San Diego real estateFirst you must acknowledge that the homeowners who are losing their homes to foreclosure are unable to return to the market and qualify for a mortgage for a minimum of 3 years since subprime lending is essentially gone. Assuming that the housing market will recover as soon as the job market recovers is naive.

By cutting interest rates we can keep the party going for a little while longer but not forever. Ultimately the lack of a productive, healthy manufacturing economy will drag the U.S. down. Look at what has happened to GM

The bottom line is that in addition to not making cars worth buying, GM caved to the absurd demands of the UAW. Now the UAW has killed their goose; people can bitch about Wall Street greed but for my money the American unions are cut from the same cloth as the so called "fat cat" executives.

In order for the job market to recover housing must begin to stabilize and that will not happen until the people who cannot afford their homes have lost them or their mortgages have been successfully modified. I expect to see housing stabilize in about 12-18 months followed by a recovery in jobs.

I also expect that new home construction recovery will be slow and that there will be significant differences in what is built. Smaller, more efficient homes will replace a significant portion of the McMansions. 

According to estimates by Zelman & Associates, single-family existing home sales will continue to decline next year by 9% and in 2011 by a further 3%. New home sales will bottom in 2010, but house prices, down 19% year-over-year in February according to the S&P/Case Shiller Index will continue to fall through 2009 to levels last seen in 2003. A ray of light means precious little when everything is factored in. I

Potential San Diego real estate investors are wise to watch any pseudo real estate sales rally from the sidelines.

All this to point out that: Don't expect San Diego housing to bounce back any time soon.        San Diego real estate


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