Are You a Bottom Feeder?
Real estate blog talk has quickly moved from the looming fallout of the lending crisis to the reality that it’s here. We’re no longer buzzing about the foreclosures to come. Instead, we’re talking about the foreclosures that are here, how lenders are responding and the development of new schemes surrounding the turmoil. Pretty soon we’ll shift with the market and the talk will turn to whether or not we have reached bottom. I think we have to be pretty close.
It looks like conforming loan limits will be raised, making it easier for homeowners to refinance higher priced properties at lower interest rates which is especially good news for San Diegans because our median home price is $505,000 which is above the existing limit of $417,000. It will also allow bigger mortgages to be purchased by public lenders which will relieve some private lenders who are holding onto troubled loans.
Realtors, developers and buyers are responding quickly because there is some urgency built into the temporary increase which is slated to expire on the last day of the current year. Even so, home prices really haven’t fallen as substantially as some had hoped they would by now. If we have indeed reached bottom, that means that home prices have only come down marginally from the median price of $517,500 at the height of the boom; not quite the reversal some had hoped for but good news for existing homeowners and sellers alike.
Recent San Diego Sweet Digs Posts:
News Blip – Stuff You Should Know
Monday Madness – You Have Permission!
Sean said:
RE: Even so, home prices really haven’t fallen as substantially as some had hoped they would by now.
It took 6 years to build this bubble, it’s not going to bottom in 1 year. It’s a slow painful unwinding process that is just beginning. Look for 2008-2010 to be painful years as money is tight, inventory is high, and buyers are scared. Homes are not as liquid as stocks that can correct in weeks so don’t expect this market to play out quickly. I would expect at least 50% of the time it took to build the bubble, so maybe 2009 might be the middle of the decline. Just a thought. I am not an expert, but then again I waited and didn’t buy in 2006 when all the so called experts said there was nothing to worry about.
February 14, 2008 11:23 AM
Paul said:
Not sure where you get your numbers: $517k and $505k seem to be way off. Here is what the Union Tribune reported:
http://www.signonsandiego.com/news/business/20080213-9999-1n13housing.html#name
There numbers are really very different. $472k and $429k are the y-o-y numbers. I can’t remember what the peak was, however it was much higher than $472k. Those numbers included all=condo’s, resale SFR and new construction. Even if you just go with resale SFR numbers, you’re still way off.
February 15, 2008 6:52 AM
Carol said:
$505k is the median home price for San Diego County as set by the Federal Housing Administration. $517k was the high in Nov ‘05 and is consistent with what the SDUT reported in the article Paul referenced.
I sure would like to see prices continue to come down, though I’m not sure I agree that we are only one year into the decline or that time alone is the right measurement. I do agree that other things are contributing (the economy, stock market, recession fears, et al).
February 16, 2008 11:01 AM