By Dr. Lynn Reaser
Q: Do you expect the apparent double-dip in home prices nationally and locally to continue through the rest of the year?
If the index is 153.88 for San Diego as of March 2011, how much lower do you think it might go? The cyclical low was 144.43 in April 2009.
A: No. National and state tax incentives gave housing a temporary boost which has now faded. The jump in oil prices, tightening of lending standards, and ongoing release of foreclosed properties have also weighed on housing. Although the overall economy has recently softened, better growth should resume in the second half of 2011 as supply chain disruptions from Japan’s earthquake ease, oil prices moderate, and emerging markets see further growth. San Diego’s support from its technology, tourism, foreign trade, military, and health care sectors should support job gains and some firming in housing in the second half of 2011. Home prices might dip another 1.5%, but the resulting 151.5 Case-Shiller Index would still be about 5.0% above the 2009 low.