Trouble Ahead for San Diego Real Estate In 2012?

The San Diego Real Estate Market May Reach a Hurdle In 2012

San Diego Real Estae market still in questionSan Diego’s Real Estate market may face another down-turn in the year 2012, and there are many reasons why. Remember, lots of the adjustable home loans were designed with 5 and seven year interest changes. Many home loans are ready to re-set next year since the San Diego Real Estate market boomed in the summertime of 2005. The saving grace is that IRs are near best-ever lows and IR shock will not be a major factor. The downbeat with these mortgage changes will be the ‘reality check ‘ factor.

How many homeowners will suddenly awake to the proven fact that their home is now worth many thousands of bucks less than their mortgage balance? Only the naive will accept that their San Diego real estate  value will snap back soon. The Northwestern School of Chicago has found that as many as one in four defaults could have been strategic. Driving this phenomenon is the increasing number of homes that are terribly “under water,” owing way more than the current value of their homes. First American CoreLogic, a real-estate info company, estimates that 5.3 million U.S. Homes have mortgage balances at least twenty percent higher than their homes ‘ value, and 2.2 million of those homes are at least fifty percent under water.

The issue is worst in Arizona, California, Florida, Michigan and Nevada. So, whether you believe the San Diego Real Estate market has bottomed, the reality is, it will take numerous years to regain equity losses many have endured. Talking-heads who claim the U.S. Housing market has “bottomed,”  in 2011, may not have a full understanding of fundamental economics. Government and the overwhelming majority of media are utilising the old method of making an attempt to talk us out of this downturn. Any bit of positive new is over-emphasized while the awful, practical conditions are barely noted. The governing body has spent trillions of bucks and hasn’t made ca major impact on the difficulty. Executive saved Wall Street banks, at least for now, will executive platitudes actually turn around our economy? The administration thinks so. They are closing their eyes and wishing actually, really hard that it does.

They also should do not forget to click their ruby-red heels three times to insure success. The best parallel to our existing situation remains the Great Depression. In 1930, we had a fifty percent stock rally and abounding “green shoots” before the market turned down in a relentless decline. This time the government intervention is much bigger, but so as well, is the credit bubble. Many agree the real jobless rate is 17.5%. How can the housing market improve till unemployment seriously improves? Property values only go up if there is a rise in demand. That’s not happening. The birth rate of the US is just enough to sustain our population, little more, and it would be negative without immigration. Another significant component having an effect on San Diego real estate demand, is that the severity of our existing home worth decline seems to have damaged the back of the story that you could not lose money buying San Diego real estate. Till the devastation to San Diego real estate values, fades from the collective consciousness, demand for housing will be a fraction of what it was. Those who invest in San Diego real estate and expect values to appreciate need to face the incontrovertible fact that by mid-2012 there is a high chance we’re going to be in a rising interest rate environment, which should boost costs on mortgage loans significantly.

We all know it is now much more difficult to be accepted for a mortgage even with some of the lowest IRs in history. What will happen when interest rates move up? Will the government again step in with some type of subsidized interest rate / qualifying programme (rather like the sub-prime debacle)? My idea to stabilize the San Diego real estate market is for the governing body to assign speculators who buy and hold houses for at least 3 years, but not more than 7 years, one hundred percent exemption on any capital gain they may realize.  I believe it might be a sure-fire fix to our housing doldrums. Our already high electrical, water and gasoline taxes, suggests San Diego Real Estate owners ‘ disposal revenue is heading for obliviousness! Further combination with the administration’s new health care costs and Cap & Trade’s dramatic impact on utility costs, only the hope & change commissars will be in a position to afford California detached homes. The California masses will be, out of need, made to live in gigantic loft complexes.

The California standard of life will take a massive hit, but look on the bright side… Mass apartment complexes will reduce commuting, contain urban growth and cut down on carbon emissions! Perhaps, most vitally, the extra taxes will insure the California public workers annuity plans will continue to provide lottery-sized benefits into the near future. Increased rates to support currencies will increase deflation. Intensifying levels of insolvency and foreclosure due to salary decreases and job loss will increase deflation. A century of inflation is coming unwound in a decade.

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