SSFG: 2012 San Diego County Outlook
Posted by Russ Schreier | Visited 188 times, 1 so far today | Leave A Comment »
Published by Alex Manessis and Russ Schreier of Samuel Scott Financial Group
Depending on whom you ask 2012 is expected to hold many things in store for us. Ask a politician they will talk about the upcoming elections. If you talk to an economist they will likely discuss the Euro Debt crisis. Ancient Mayans would tell us we are all doomed. When someone asks what the housing market has in store for us in 2012 the answer might surprise you, stability.
Home values in 2012 are expected to stay relatively flat during the course of the year. It would be fair to say that most markets, including San Diego County, have bottomed out and will stay relatively stable this coming year. Growth is expected to begin in 2013, but for now things should stay pretty much the same in either direction. What does this mean for San Diego County? The median home price should stay in the $350,000 to $370,000 range for the time being. The implication for home purchasers is that no longer should they wait for prices to drop further to get the home for the lowest possible price.
What about the record low interest rates that are currently anywhere from 3.75% to 4%? Will these continue into this New Year? The answer is YES. Interest rates are expected to stay low until at least mid-2013 according to the Federal Reserve’s Federal Open Market Committee. This coupled with the Euro Debt Crisis will work in conjunction to keep interest rates at about 4% for the near future.
According to many projections the economy as a whole is expected to have a year of slow, modest growth. However, this is still a positive sign after several years of economic slowdown. Household income increased 2.7% between August and November 2011 according to the Wall Street Journal, giving us another indicator of economic growth in the year to come. The unemployment rate is also expected by most to decrease (although not dramatically). These three factors will hopefully translate into a greater willingness to spend and specifically the willingness and ability to purchase a home. If the trends hold steady throughout the year we will hopefully see an uptick in purchasers.
In the second half on 2011 the number of foreclosures and notice of default spiked a bit nationwide, and San Diego County followed this trend. The implication is that this year the number of foreclosed homes hitting the market in San Diego County will increase. Although foreclosures have many downsides, one positive is that buyers have the opportunity to get a deal on homes that would previously been unavailable. This is because bank owned properties (REOs) is increasing faster than the banks can sell them off. The end result for a purchaser is that the bank is willing to short sell in order to get the foreclosed property out of inventory.
Overall the housing market is going to stay stable, which is a positive sign for those looking to purchase or refinance a home in 2012. As previously mentioned this year will see prices stay flat, historically low interest rates, an increase on the number of homes on the market, and growth (however modest) in income and the national economy. By purchasing now one can save hundreds of thousands of dollars over the life of the loan compared to a loan for the exact same house just 5 years ago. Those looking to refinance can likely save hundreds of dollars a month this year through a refinance, allowing for more disposable income for the average family (something that we can all appreciate).
2012 is likely going to shape up to be a flat stable year, but if you are in the market for a home or refinance the one you own 2012 likely holds the buyer’s market where you are most likely to find the opportunity to stabilize your own financial future. If you have questions about purchasing a home or refinancing, contact a loan professional at Samuel Scott Financial Group.
