Most San Diego incomes have not increased by any meaningful amount for years. The amount of a mortgage loan a home buyer is qualified for is determined by their “documented†income. Home prices will have to decline to a level to match the buyer’s purchasing ability.
It is a curious fact that the continued government intervention in the market for the benefit of the FED, FNMA, FHLMC, Wall Street firms and banks seem to be setting up taxpayers for new housing problems down the road.
The use of below market interest rates, tax credits, grants to “non-profit†organizations for down payment assistance, and in Arizona ,silent seconds (no interest, no payment, debt forgiven after 15 years) for 22% of the purchase price, have the effect on new home buyers of overpaying for their homes and artificially increasing the value of real estate.
When the government’s money (our money, our children’s and grandchildren’s money) runs out, the undue stimulus and creative financing will finally be eliminated from the market leading to a sustainable lower value of real estate.