Sunday, December 20, 2009
Cautious, but Good News for the San Diego Housing Market in 2010
With prices up 6.6% in San Diego County, the medium priced home now $325,000, and the number of homes sold up 18% compared to one year ago, it is fair to say that San Diego County is in a stabilizing market. Just last week appraiser, Leon Crowell, confirmed, "We can no longer say we are in a declining market. "
While some are cautiously optomistic about the unemployment rate improving from 10.7% in October, the highest rate since the Great Depression, to 10.3% in November. According to Chrisopher Thornberg, who was one of the first economists to forecast a major recession, said the recession has hit it peak. "All the data shows that the U.S. economy has more or less bottomed out. We should only be surprised if unemployment wasn't peaking. The bigger issue is how fast of a recovery we're going to see," said Thornberg, who works for Beacon Economics in Los Angeles.
Coupled with the news that foreclosures rates are dropping. According to the MDA DataQuick, San Diego County Foreclosures by all lenders totaled 11,393 from January to October was down from 15,414 for the same period last year. The reduction continues, the number of foreclosures in October 2009 numbered 1,346 dropping 4.7% to 1,283 in November. Some believe under government pressure and incentives, banks are delaying or canceling foreclosures while working with home owners to modify their loans or arrange for short sales.
In the short term, the reduction in foreclosures and the reduction in unemployment could help stabilize the economy and housing market, prompting homeowners with equity, not in distress, to sell and buy another home. Some believe that many owners will still hold back because of loss in value compared to a few years ago. Since 2006, prices tumbled as a result of many homes being lost to foreclosures. But as one of my wise sellers recently said, this is the time to sell and move up because "while my home value has fallen, I will get a better deal on my new home and 10 years from now, the home I am buying will be worth much more in proportion."
So while I agree with Thornberg, the question is how quickly the recovery will occur, it does seem there is hope on the horizon.
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