By Dr Lynn Reaser
Question: Will San Diego home prices be higher in December 2011 than they were in December 2010? If the overall median was $333,000 last month, what will it be at year’s end?
Look for home prices to show a modest rise of about 1% this year, which would take the median to about $336,000. Several forces will restrain prices, including the steady release of foreclosed homes into the marketplace, tighter standards for buyers to qualify for home mortgages, and a greater share of sales accounted for by first time-buyers at the lower end of the price spectrum. This year’s expected slight firming would only repeat last year’s 1% gain but should be based on a better showing for the overall economy, more jobs, further gains in the stock market, and efforts of potential homebuyers to head off higher interest rates.
On balance, 2011 stands to be another year for San Diego housing to stabilize and rebuild its foundation.