San Diego Housing Market Slides, Hinders Economy
The San Diego housing market has taken a downward plunge, dragged down by bad credit mortgage concerns and a rather sharp decline in home-building, according to a report released Wednesday by the University of San Diego.
And with that San Diego housing market decline, the entire regional economy has followed, a prominent economist believes.
The slumping housing market is negatively impacting employment and income, hurting consumption, and leading to a surge in the number of foreclosures, according to the report.
As California mortgage problems mount, more homes are pumped onto the market, while fewer would-be buyers are jumping in, content to wait out prices and see how low they will go.
“At this point, there appears to be no sign of a turnaround in the near future, with the local economy expected to be weak through at least the early part of 2008,” wrote Alan Gin, who compiled the report.
“Although a full-fledged recession is not likely for San Diego County, the possibility is higher than just a few months ago and cannot be discounted.”
Five out of the six components that Gin uses to gauge the health of the economy were negative in June:
- Building permits
- Unemployment insurance
- Consumer confidence
- Help-wanted advertising
- The national economic outlook
The only positive note came from local stock prices, which participated in the upward surge of the market that briefly took the Dow Jones Industrial Average above the 14,000 mark last month.
Nevertheless, San Diego mortgage activity has waned and economists do not predict a major housing market turnaround until 2008 or even into 2009.
SOURCE: San Diego Union-Tribune