Foreclosed Homes Continue to Depress San Diego House Prices
Home prices in San Diego have not stopped their downward direction because of the continued addition of foreclosed homes to the housing market. In September this year, San Diego’s house prices dropped by 2.4 percent from August and by 26.3 percent compared to September 2007, based on the Standard and Poor’s/Case-Shiller Index.
Similar downward trends are shown in the Case-Shiller report on housing markets across the U.S., which highlights the 17.4-percent decline of home prices in the 20 biggest cities in the country.
According to the Case-Shiller data, 13 of the 20 biggest cities registered new record rates of home price decreases in September, with Phoenix and Las Vegas as the worst affected cities. In Phoenix, prices dropped by 31.9 percent compared to September 2007 while in Las Vegas, prices fell by over 30 percent.
The third worst market is San Francisco, with prices dropping by 29.5 percent; the fourth is Miami with prices dropping by 28.4 percent; and the fifth is Los Angeles with prices dropping by 26.3 percent. San Diego is the sixth weakest market, with a decrease rate nearly equal to that of Los Angeles’ rate.
The housing markets least affected by the foreclosure disaster are the cities of Dallas and North Carolina’s Charlotte, with a decrease rate of 2.7 and 3.5 percent respectively, compared to 2007 prices.
Real estate analysts say that foreclosures have slowed down a bit in San Diego due to some foreclosure prevention measures introduced by state and local government agencies. But they are concerned that the slack is just temporary, as foreclosed homes from previous inventories continue to flood the market and depress prices.
Norm Miller of the University of San Diego Burnham-Moores Center for Real Estate predicted that because of the continued rise in unemployment rates and expected resurgence of foreclosure rates, home prices will only go back to their 2005 peak levels after several years, possibly after 2016.