San Diego Real Estate ... Double Dip
2010 July 13
The San Diego Association of Realtors reported active listings on the market stood at 12,047 as of Monday, up from 9,209 a year ago. DataQuick recently released the information that sales of condos and homes totaled 3,885 for San Diego in June 2010. That was the highest figure in four years; it is still 17 percent below the average activity for that month since the company began tracking the market in 1988. Keep in mind, a large number of properties that closed in June reflected sales influenced by the Federal tax credit which applied to homes that entered escrow before April 30th.
Figures provided by FICO Inc. show that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It’s unlikely they will be able to get credit cards, auto loans, or mortgages under the tighter lending standards banks now use.
Forbes said: “The final figures for the U.S. housing market’s performance thus far in 2010 won’t be officially released for several weeks. But a review of the best preliminary data available indicates that the recovery in home values that began in early 2009 has stalled. A second dip is clearly under way in some places, if not across the entire U.S.”
Until April 30, the federal government granted an $8,000 tax credit to homebuyers who hadn't owned a home in the previous three years. The credit created an incentive for buyers to get into escrow in the spring, but California created a credit for buyers who completed a sale after May 1. The possibility of getting both the federal and state tax credits created a bump in May that fell off in June.
The best seasonal real estate marketing time of the year, combined with some of the lowest home mortgage rates in 40 years, prices at 40% below their 2005 peaks, and the tail end of the Federal tax credits, could at best produce anemic real estate sales results.
In my 7-7-10 my post: San Diego real estate 2010 2nd. Half Outlook … double-dips I said that my local San Diego real estate market observations indicated that we are heading into a double dip for the real estate market. This is one of those times I would like to be wrong.
The real estate downturn that started in 2005 was so severe and prolonged that it has broken the myth that owning San Diego (or California) property was a sure way to gain wealth through guaranteed appreciation. While the myth has been broken, it still can be another rocky ride in real estate values. Sit down, buckle up and hold on!
Bob Schwartz is a Certified Residential Specialist, San Diego real estate agent specializing in San Diego California real estate & co-owner of an Internet search engine optimization firm, WebsiteTrafficBuilders.com, specializing in domain name registration and Internet domain website hosting. Bob received his BBA majoring in real estate & computer programming. Be sure to visit his popular San Diego real estate blog
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