2014 Forecast For San Diego’s Housing Market
Tuesday, December 17, 2013
Aired 12/17/13 on KPBS Midday Edition.
Alan Gin, professor of economics at the University of San Diego, and author of USD's Index of Leading Economic Indicators
The real estate bubble is widely accepted as one of the major causes of the Great Recession. For the past five years, people have been looking to real estate as a bellwether of the nation's recovery, but looking for definite trends has proved elusive.
There's no doubt real estate values are in much better shape than they've been in years. According to the latest housing market report from San Diego-based Dataquick, in San Diego County, the median home price last month was $415,000. That's up almost 16 percent from November 2012.
California's foreclosures rate is down 60 percent from last year according to a report out today from the Public Policy Institute of California.
But full recovery has not taken place, and it's been hard to predict when it will.
Also in the mix: whether interest rates will remain at record lows, if the job market will continue to improve and if consumer confidence will continue to strengthen the housing market.
Alan Nevin, a real estate economist with the Xpera Group said, "If you want the economy to recover, you start making it easier for builders to build homes."
But Nevin said we are nowhere near building the 10,000 new housing units each year that would signal a full recovery from the recession.
"When we had a boom, we had 90,000 construction jobs. Now we're down to 50,000. That was an enormous revenue stream to the county," he said.
Nevin said a healthy new home construction market has a large multiplier effect on a region's economy: for every $1 spent on new home construction, $2 goes back into the region's economy.