Tuesday, March 13, 2007
Economists are worried about an unstable housing market in San Diego. Home sales increased slightly last month. But so did foreclosures. KPBS Radio's Andrew Phelps reports.
Steve Cochrane is an economist for Moody's Economy.com. He says we may see a lot more foreclosures coming soon.
Cochrane : The problem with the real estate market is that when it gets into a situation like this, it can gain momentum that's hard to stop.
Here's why: When the bank repossesses a foreclosed home, it tries to sell it off as quickly as possible.
Cochrane : And so they're willing, usually, to sell at a low price to just get rid of the property. And then that devalues like properties around it, and pretty soon the whole market begins to slide under the weight of that pressure.
Cochrane says this is good for homebuyers. But with supply outpacing demand, home-sellers have it rough. For KPBS, I'm Andrew Phelps.