There might be a price bottom forming as first-time buyers and investors vie for homes on the lower end of the market, but it was up to debate whether it could last.
Seven local real estate experts met at The Daily Transcript offices Friday to discuss current issues in the housing market and talk about where home prices are headed.
Pictured here are, starting from the left, San Diego BIA President Andrew Murphy, SDSU Professor of Real Estate Mark Goldman, California Association of Mortgage Brokers San Diego Chapter President Dave McDonald and University of San Diego's Director of Real Estate Academic Programs Norm Miller discuss issues regarding the housing market at a Daily Transcript roundtable. Photo by J. Kat Woronowicz
San Diego County home resales have been up nearly 50 percent this year compared to 2008. The median price of both detached and attached homes have hovered around $340,000 and $200,000, respectively, for the past four months.
Participants said there is heavy competition for lower-end homes.
“It’s a great opportunity for first time buyers,” said Mark Goldman, professor of real estate at San Diego State University and certified mortgage planning specialist. “But the restrictions are getting so tough that first-time buyers can’t hop in and if they can, they’re being outbid for these buy investors -- all cash.”
Goldman said lending needs to pick up rather than money flowing out that comes from private investors paying cash.
With multiple bids coming in for less expensive homes, Norm Miller, director of real estate academic programs at University of San Diego, said a floor can be formed, regardless if the people buying are private individuals or investors.
However, the housing market could have further to fall depending on how the economy fares within the next year or so, said Alan Gin, professor of Economics from the University of San Diego.
“It all comes down to: is the economy growing in terms of jobs? And right now it isn’t,” he said. “So that is the fundamental problem.”
Adding to problems in the housing market is the general lack of consumer confidence, coupled with uncertainty about the country’s economic future, said Gin.
Homebuilders like Guy Asaro, the president of McMillin Homes, face similar issues that are complicated with resale home prices so low that new homes cannot compete.
“Everyone in the money world recognizes historic opportunity to buy property at below replacement cost,” he said. “Once this stuff is gone, it won’t be at this price ever again because we can’t replace it at this price whether it’s new or used.”
While the housing experts did not come to a specific conclusion about when or how home prices will increase in the future, Miller said it is important to note recovery does not come in the shape of a “V”.
“Anybody who tries to time it is nuts,” said Miller about trying to purchase a home at the bottom of the market. “If you get within three months or five months of the bottom you did great.” |
|
