Matt Battiata on “These Days” on 89.5 FM KPBS Radio
February 19, 2010 by admin · Leave a Comment
**Matt Battiata was a guest on “These Days” with Maureen Cavanaugh this morning – 2/18/2010**
I was a guest this morning on “These Days” with host Maureen Cavanaugh on 89.5 FM KPBS radio, along with San Diego Union Tribune real estate reporter Roger Showley. We will be posting an audio clip of the show on the “In the News” section of Battiata.com shortly.
On the show this morning we discussed the January San Diego sales data that shows a 7.6 % decrease in the median price for San Diego County, and took calls from listeners.
The big debate in the media and among real estate “experts” and pundits continues to be “Are we at the bottom of the market in San Diego?” – and most seem to think we are, pointing to the increase in the median price for the last few months, up until January anyway. Those who maintain this position discount the January sales stats by saying January is always a slow month and that we cannot draw any conclusions from one month, especially January etc.
The irony here is that when we saw a .75% (that’s right, less than 1%) increase in the median price in August 2009, these same real estate experts hailed it as definitive proof that the market had bottomed out and was on the rebound, despite the fact that August is every bit as slow of a month as January.
So where are we really? Why are we seeing fluctuations in the median price? Why are we seeing multiple offers on listings? What is going on?
The reality of the San Diego market, as I explained this morning, is that the current housing inventory is artificially low for 2 reasons –
1) The banks are withholding inventory from the market – homes they have foreclosed on but are not releasing to the market and selling. This is the “shadow” or “phantom” inventory of foreclosed homes that the banks publicly deny exists, but may number as high as 20,000 in San Diego County and higher in Riverside County, and stands to increase dramatically in 2010 and beyond.
2) Four concurrent foreclosure moratoriums in 2009 meant that most people who were in default and would have been foreclosed on in 2009 did not get foreclosed on and therefore their homes have not hit the market.
Finally, as I mentioned on the air this am, historically, the San Diego market has been a roller coaster, with very high peaks and very low bottoms. We had a peak in 1980, a bottom in 1984, a peak in 1990, a bottom in 1996, a peak in 2005 and a bottom…I would say in 2012. Why? Consider this: a tremendous number of people in San Diego either bought at the peak of the market and put very little down (as the banks lending guidelines encouraged them to put as little down as possible), or refinanced at the peak, and pulled out all of their equity. In other words, many, many people owe peak prices on their homes.
In other words, they are upside down, and will continue to be so until prices come back up to peak levels. Until then, If any of these people need to sell for any reason, be it a job transfer, job loss, divorce or any other reason, they are going to be best case, a short sale, and worst case, a foreclosure, which will continue to put downward pressure on prices in San Diego County.
