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At a time when some local economists are forecasting a bottoming of the housing market, Blue Sky Capital is predicting a second wave of county foreclosures that could be worse than the one a few years back. Blue Sky says mortgages secured with Option ARM and Alt-A funding are about to reset at much higher rates, particularly in Carmel Valley. (Alt-A mortgages are between prime and subprime. Borrowers often have less than full documentation and unimpressive credit scores. Option ARMs are adjustable rate mortgages offering several different payment options.)

A similar controversy rages nationally. Today (July 24) Zillow.com said that national home prices have hit bottom, and 40% of 156 major U.S. markets should enjoy price increases in the next 12 months. But Radar Logic Research said that those calling a bottom "are being dangerously short-sighted."

According to Zillow, San Diego County home values rose 1.7% in the second quarter, less than the 2.1% gain of the largest markets as a group. San Diego values fell 0.1% from a year ago, worse than the 0.2% collective gain of the major markets.

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Comments

stingray July 26, 2012 @ 9:30 p.m.

Inflation is just around the corner. Interest rates will climb, and then where will prices head...down.

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Don Bauder July 26, 2012 @ 9:53 p.m.

The economy is very weak. Consumers will continue to cut back spending. Also, the government's way of measuring inflation is rigged to make it appear low. But these high commodity prices will do some damage, and certainly the Fed's madcap money creation will create havoc, but it might create a financial bubble or two rather than virulent inflation. At some point, interest rates must go up, but may even go lower in the short term. Best, Don Bauder

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SurfPuppy619 July 27, 2012 @ 1:42 a.m.

Inflation is NOT just around the corner-it is here right now, why do you think food prices, energy prices and every other commodity has gone thru the roof in the last 2 years?

And I said in 2008 were were going to be in recession for 3-5 years, I revised that in 2011 to 5-10 years. It has been 4 years and I think if we pull out of this recession/depression before 2016 we will be lucky.

We have not doing ANYTHING to CREATE JOBS, and I am not talking about gov jobs or service sector jobs, i am talking about jobs that will get us out of poverty. And even with good job creation we will never get out of the hole we have dug without cutting gov spending, specifically the compensation paid to gov employees.

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Don Bauder July 27, 2012 @ 7:58 a.m.

Many government salaries and retirement packages are too high -- no question. There has to be reform, but the reform won't stimulate the economy. Much government spending buoys the economy at times like these -- transfer payments such as Social Security, veterans's benefits, welfare, etc. Such payments help bolster consumer spending, which is 71% of the economy. Food stamps are another help: they keep some poverty-stricken families alive, and also boost the food industries. Defense spending boosts economies, particularly San Diego's. This goes to the heart of differences between Republicans and Democrats; Republicans want to boost defense spending and slash entitlements; Democrats want to boost entitlements and cut defense. In both defense and entitlements, there are many abuses -- no argument there. But despite all the rhetoric we hear from politicians, promising to eliminate waste, fraud and abuse will not cure the problem. Best, Don Bauder

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Don Bauder July 27, 2012 @ 8:39 a.m.

The trouble is that we are not going to get those private sector jobs. Companies have learned how to operate with much lower employment. Yes, compensation to government employees, including retirements, is too high, but curing that problem will not boost the economy noticeably on the short run. Transfer payments such as Social Security, veteran's benefits and welfare help buoy consumption, which is more than 70% of the economy. Defense spending also helps. And that's the difference between Republicans and Democrats. The Republicans want defense, the Democrats transfer payments. Best, Don Bauder

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SurfPuppy619 July 27, 2012 @ 5:28 p.m.

SS and other entitlement programs need to be frozen, now, or they will go bust.

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