San Diego 2013 Real Estate Forecast
This video is the 2nd. of two videos on my personal 2013 outlook for the San Diego real estate market. In this video I note the negative trends in the San Diego and California real estate markets in 2013.
In the first video on my San Diego 2013 housing market forecast, I note the positive factors for the San Diego California real estate market in 2013.
The modest gains in activity and prices I forecast, will still leave many San Diego homeowners who purchased homes in the early years of our housing decline, still underwater.
Currently, the largest factor contributing to the San Diego housing market recovery is our government’s intervention into the mortgage market. Currently, the Federal Reserve is purchasing $40 billion a month of mortgage-backed securities from the U.S. Treasury. Where is the Federal Reserve getting this 40 billion a month from … they are just printing it!
Although many in the real estate industry applaud the government for this unprecedented expansion of the money supply because of its direct impact on home sales, I personally believe they are shortsighted. Ultimately, such actions inevitably decrease the purchasing power of the dollar. Yes, even though the amount of your savings may remain constant, the goods and services you can could have purchased for a dollar in 2008 is already somewhat less than what the same goods and services would cost you today. This Federal Reserve policy insurers that your savings and retirement accounts purchasing power will continue to erode.
A number of economists feel that the current deficit spending and ever increasing money supply is building a new bubble in the stock market. But, whatever you believe, one thing is certain. Once the economy really starts to improve, interest rates always move up. So, the big question is when this occurs, will the condition of the housing market be able to absorb it or will we once again enter into a period of stagnant or declining home values?
