San Diego Real Estate – Economic Predictions Indicate Improved Real Estate Market in 2010
November 14th, 2009 categories: San Diego Real Estate
With the now approved extension and enhancement of the Federal Tax Credit for Buyers of residential real estate, we will see a few bright signs through the expanding real estate market at least during the first half of 2010.
While I expect the Winter and the Spring markets to be at least as good as much of 2009 , the indicators will show some more improvement in 2010. Regretfully there will be mortgage resets, the possibility of increasing unemployment and more homeowners defaulting on their mortgages which will offset some of the more positive improvements of the market .
This is not to give a negative perspective of our markets but one of realistic expectations. I expect we are at or near the end of the downward price spiral and things are showing signs of a bit more stability. Interest rates are expected to remain historically low through the first half of the year and beyond that no one is certain about where rates will go. My guess is that they will remain low through the whole year.
Statistically we currently have between 1.5 and 2. 6 million households in the US that are at some stage of foreclosure. And through a larger scope there are over many millions of households that are late on their mortgage. A good percentage of the late pays now being caused by unemployment.
I expect to see more short sales and Reo’s ( Bank Owned Foreclosed Property) in the market in 2010. The National Association of REALTORS predicts in the range of 4.7 million home sales around the US. Here in San Diego a good percentage of our share of those sales will be distressed properties. Maybe as high as 30 to 35%. Equity Sales will increase in 2010 but currently the market has a declining inventory of properties for sale.
We have a ways to go to get a to a fully improved market, although there are new reports daily that the trends are becoming more favorable each quarter. We have had 7 straight quarters of the market moving in an upward direction. We have seen prices begin to stabilize and we have seen prices even increase in a couple areas. We have heard that the percentage of homeowners that are upside down is declining. All good news. We are not out of the woods as yet but we are beginning to see sunlight again through the trees.
