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Harmer nonetheless predicts that unsold downtown inventory — which could reach roughly 1400 homes in the next few months — could shrink to what he characterized as a normal inventory of about 400 within ten months. That projection counts on maintaining current sales levels and no increase in foreclosure sales. And Harmer’s projection could also be upset by a rise in prices that would stimulate developers to return rental units to the condo market for sale.

Louis Galuppo, director of residential real estate at the Burnham-Moores Center for Real Estate at the University of San Diego, isn’t so sanguine. He said many lenders have held off on foreclosing until they could understand new programs proposed by the Obama administration to prevent foreclosures. But those programs will work for only a small number of distressed homeowners, Galuppo has concluded.

“We will see a high number of foreclosures over the next year,” said Galuppo. Nonetheless, he added, “I think we are very close to the bottom for existing homes.”

Pete Thistle, a broker with 92101 Urban Living, said there are currently many folks shopping for condo bargains. And with the dramatically lower prices, he said, “All of a sudden, San Diego is affordable.”

But the questions keeping many from venturing into the market remain: Will the local housing market be even more affordable one year from now? And will I still be working next year?

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