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Housing Market On Its Way Up

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GLORIA PENNER (Host): We start our economic analysis with the local housing market, which has in been in a steep dive for the past two years, but recently home prices have been on the rise. KPBS Reporter Sharon Heilbrunn has an update on the current status of buying and selling homes in San Diego. SHARON HEILBRUNN (KPBS Reporter): For almost a year, home prices in San Diego County have crept higher. The most recent home price index report from Standard & Poor's/Case-Shiller showed that home prices in San Diego County rose .4 percent from September to October, when home buying activity usually slows down. So, is this a reason to be optimistic about the housing situation in San Diego? Mark Goldman, a certified mortgage planning specialist and lecturer at San Diego State University, is hesitant. MARK GOLDMAN (SDSU Lecturer, Certified Mortgage Planning Specialist): It's always a good thing when home values go up. We've lost a great deal in value in San Diego. Prices are down over a third, about a third of homeowners are upside down on their homes. So it's good that prices don't decline further. What does it tell us about the future? Not very much, unfortunately. I'm hoping we're nearing a bottom in the market. But the two questions I always ask is, what brought us here, and what's changing? Goldman attributes improvements in the housing market to very low interest rates and supports from the first time homebuyer tax credit. GOLDMAN: In 2009, the federal reserve committed to purchase on and a quarter trillion in mortgages and to help support the residential mortgage market. But what happens when this government help expires? GOLDMAN: Those supports, those props of the market, are going to be removed during the first quarter and first half of 2010. My concern for 2010 is that none of the fundamental problems that brought the housing market down have not been addressed, in my opinion. Goldman is talking about unemployment, which is at 10 percent right now in San Diego County, and active foreclosures. GOLDMAN: The number of active foreclosures -- the last report was in Oct 2009 -- are almost double what they were the year before. But there are some promising signs. GOLDMAN: One of the things we've seen in the last 30 days is that the gov't has tried to put more pressures onto banks to mitigate foreclosures by doing realistic loan modifications or allowing deeds in lieu of foreclosure or allowing short sales. And this is still a buyer's market. GOLDMAN: Home prices have fallen to the point where the cost to own is similar to the cost to rent. So if someone is thinking about buying a home and staying in it for a long time, this could be a great opportunity. HEILBRUNN: Goldman says is that if you do try to buy a home in this market, be cautious, especially when dealing with a foreclosure or short sale, which could look like a good deal but in reality, end up costing you more. We want to know -- what do you think is needed to turn around the housing market in San Diego County in 2010? Log onto kpbs.org/sdweek and leave us a comment. For KPBS, I'm Sharon Heilbrunn.

Comments

Avatar for user 'SanDiegoAgent'

SanDiegoAgent | January 8, 2010 at 8:17 p.m. ― 4 years, 3 months ago

For another take on the 2010 San Diego real estate outlook, you may wish to read my 12-17-09 blog post titled: "San Diego Real Estate 2010 Forecast
The year of the strategic mortgage default" it can be viewed at:
http://www.brokerforyou.com/brokerforyou

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