Home Price Falls Near Bottom, Report Says

Although 2009 will be a “throwaway year” for San Diego County, with double-digit unemployment, growing office vacancies and declining retail sales, local housing prices will hit bottom this fall, heralding an eventual recovery, UCLA's Anderson Forecast predicted in a report to be released today.

The Anderson Forecast, one of the state's most followed teams of economic analysts, predicted that housing prices will start rising steadily by the second quarter of the year, starting with a rebound in the price of existing single-family homes.

“When it is generally perceived that selling values have reached a bottom, sideline buyers will enter the market and conventional home sales will dominate the real estate recovery,” UCLA economist Mark Schniepp said. “Reported selling values for homes will reverse, slowly at first, and then rise more convincingly.”

The median price, which is projected to average $325,374 this year, will rebound to $490,966 by 2013, according to the forecast. That would return the median price to its levels of early last year, but would be well below the inflation-adjusted 2005 peak average of $602,327.

Some local real estate analysts say the predictions jibe with a recent uptick in home sales, although most of those sales have involved foreclosed properties.

“It's beginning to seem like we're flat-lining at the bottom of a 'U' and that things could be getting better by the end of the year,” said Gary London, president of San Diego's London Group Realty Advisors. In a U-shaped move in the marketplace, prices drop sharply and then bounce around the bottom for a while before heading up sharply.

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Source: San Diego Union Tribune, 5/15/09.