Price Increases Rapidly in Spite of Increasing Number of Foreclosures in San Diego

Photo by Renjith Krishnan

Andrew Lepage, a real estate analyst from San Diego, has reviewed that despite the increasing number of foreclosures in San Diego over the long period of 2008 and 2009, the average price of homes is not decreasing in any area. The statistics say that it has increased to a rate of 48.4 % over a period of ten years.

Those who bought their homes in 2000 are amazed to find an abrupt increase in their price in spite of the fact that there is a continuous economic slowdown over the past two years. Example can be cited from University City, where a family bought a house in 2000 at $432,000 and now they are able to sell their house at $850,000.

However, the most worrying fact is that those who bought a house during the economic boom cannot experience any gain since their home price will be over inflated in subsequent years. Moreover, they will be highly indebted, as the lenders offer enough equity loans for cars and finance vacations.

Statistics reveal that over this ten year 41,000 foreclosed properties in San Diego were sold, out of the total 510,000 foreclosed unit let for sale. During this period, about 121,000 homeowners registered their home being foreclosed. More than a thousand homeowners are still parleying to prevent their home from being foreclosed by the banks.

Le Pages has observed that lenders have squeezed their lending policies since the economic downturn and the number of foreclosure is increasing considerably. The huge amount of Fannie Mae foreclosures in the past years has motivated the revision of the lending policies in Fannie Mae.

Economists, however, have contradictory views about the upcoming house market of San Diego in 2010. According to James Hamilton, Professor of Economics at the University of California, home prices won’t rise if the median income does not grow up. He anticipates that the price increase will come to end at this phase.

Ex- California State economics professor Robert Kleinhenz, presently a renowned economist of the California Association of Realtors, however said that the foreclosure price would grow up again to its highest that peak prices might appear again in 2018 if San Diego experience imorovements in their average income.

Kelly Cunningham, renowned economist of National University, opined that economic downturn in the residential building sector during this phase will increase the demand of new housing at a rapid pace when the incomes will improve.