San Diego Real Estate & Homes for Sale :: Robert T. Boyer, Ph.D.

Original article here

Friday's unemployment report from the Bureau of Labor and Statistics is anything but a green shoot. The official U-3 unemployment number is 10.2%. The broader and more comprehensive official unemployment number, the U-6, is at 17.5%. The U-6 counts all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, and all the people who dropped off unemployment benefits because their unemployment benefits ran out. John Williams at Shadowstats.com suggests that real unemployment is actually running at 22%, which, by our calculation, is approaching Great Depression unemployment numbers.

RTB: This is worth the read, not because there are so many key government officials' predictions that have gone horribly awry, but rather for the links to the related sites and their charts. Here is one interesting chart courtesy of ShadowStats.com

And this one from MarketTicker.org

All that aside, what does this mean for the housing market, homebuyers, and real estate investors?

I can't remember where I saw it, but someone commented that there was no correlation between unemployment and an increase in home prices during the great depression, that home prices rose regardless. Well, I don't think our situation is quite the same, because I don't recall a great big housing bubble preceeding the great depression. They also did not have a homebuyer tax credit.

The only national level comment that would be fair based on this data is a general downward pressure on prices. Similarly, the escalating delinquencies Federal Reserve Board Delinquency Rates Soar Exponentially will put downward pressure on prices from more short sale attempts to more foreclosures.

However, what this will do to your local housing market will vary. I suggest the best place to start is to look at the current inventory in your market place. In San Diego we last had San Diego Homes for Sale - Months of Inventory - October 2, 2009

Most notable about the inventory level is that up to $500K for detached (and $450K for attached homes), it is a clear seller's market with less than a month of inventory in many price ranges. With the homebuyer tax credit being extended and expanded, then in San Diego, this end of the market will see even more fierce competition from buyers. I expect to see an increase in prices and continued low inventory - even if we do get some of the foreclosures to start flowing locally. The homebuyer tax credit (and current low interest rates) will trump the unemployment and delinquency pressures.

The middle of the market may gain a little from the tax credit, likely reducing inventory a little, up to $900K

However, the higher end of the market will continue to suffer and decline because there are neither incentives (phased out for too much income) nor available loans for the self-employeed people who are generally in these homes.

But, these last comments are mostly only applicable to San Diego Real Estate

From the LA Times - http://www.latimes.com/business/la-fi-foreclosures21-2009oct21,0,5605171.story

Signs are emerging that a much-feared escalation of California home foreclosures may not happen, as banks respond to government pressure and scale back their repossessions of troubled properties.

Statewide, the number of homes taken back by lenders dropped sharply in the three months ended Sept. 30, falling 37% over the same period a year earlier, when foreclosures were at an all-time high.

...

This is a well written and detailed article worth the read if you have a specific interest in California Real Estate

What is new with Del Mar real estate and homes for sale. The inventory level tells the story. The following chart breaks down the inventory into price range categories by single family attached and single family detached homes. The information is current as of October 20, 2009.

Price ranges with no sales but active listings assume are approximated based on nearby price ranges. The low price points show reasonable market strength, up to about $1.5m for a detached home. Overall, there are 12 months of inventory.

Other recent San Diego Real Estate Market Reports:
Will SELL Your Home in 6 years + 4 months, or less - GUARANTEED!!!
San Diego Homes for Sale - Months of Inventory - October 2, 2009
San Diego Homes for Sale - Median Home Price drops 7.24% in last 12 months
San Diego Home Sales Continue Normal Pace for September 2009

What is new with Carmel Valley Real estate and Torrey Hills real estate - 92130 zipcode. The inventory level tells the story. The following chart breaks down the inventory into price range categories by single family attached and single family detached homes. The information is current as of October 20, 2009.

Your budget is going to be a clear indicator whether you need to look at a condo or townhome or if you should be looking for a detached home.

Other recent San Diego Real Estate Market Reports:
Will SELL Your Home in 6 years + 4 months, or less - GUARANTEED!!!
San Diego Homes for Sale - Months of Inventory - October 2, 2009
San Diego Homes for Sale - Median Home Price drops 7.24% in last 12 months
San Diego Home Sales Continue Normal Pace for September 2009

With the end of the summer buying season for Rancho Santa Fe real estate and homes for sale, it is prudent to keep a close watch on the inventory level as it directly affects the the Rancho Santa Fe home prices and especially the time on market. The following chart breaks down the inventory into price range categories. The information is current as of October 19, 2009.

P.S. Unless you want to have your home on the market for 9 years, I suggest you avoid the $4.2m price range.

Other recent San Diego Real Estate Market Reports:
Will SELL Your Home in 6 years + 4 months, or less - GUARANTEED!!!
San Diego Homes for Sale - Months of Inventory - October 2, 2009
San Diego Homes for Sale - Median Home Price drops 7.24% in last 12 months
San Diego Home Sales Continue Normal Pace for September 2009